DELL: Facts, Stats, News and Analysis Message Board

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Technology Stocks : DELL: Facts, Stats, News and Analysis

DELL 146.68

-1.7%

Nov 7 9:30 AM EST

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To: Gabriel008 who wrote (196)	11/15/1998 11:55:00 PM
From: Gabriel008	Read Replies (4) of 335

PC Group Analysis - briefing.com Brief Industry has been on a tear over the past several weeks amid growing optimism that demand in the current holiday season will be strong... Virtually all evidence from corporate front is supporting this view... For example, Dell posted another strong quarter with top and bottom line growth exceeding 50%; Intel guided Q4 estimates higher amid signs of strong demand; and CompUSA noted that iMac sales strongest ever... Corporate sales also remain solid, easing fears that corporate America is cutting back on capital spending. Throughout this period we have advised caution due to worldwide economic slowdown... It was, and is, our contention that the sharp jump in the number of layoffs on the domestic scene will result in a more tepid retail season than currently forecasted... But right now market psychology is bullish and it wants no part of "bad" news... And based on the anecdotal evidence of strength, and the sharp gains posted by the stocks, we can't blame investors for being optimistic. However, before jumping into any of the stocks we recommend doing a little comparison shopping - after all it is the season. In the table below we take a look at how the stocks measure up on a value basis: Stock 11/13 close FY99 Est P/E PEG P/S (TTM) Average Sales Growth (Past 8 qtrs) Apple (AAPL) 35 11/16 15.2x 1.23 1.1x -21.3% Compaq (CPQ) 33 7/16 19.0 0.97 2.0 15.6 Dell (DELL) 63 15/16 44.7* 1.51 5.8 56.3 Gateway (GTW) 52 3/4 18.9 0.88 1.2 22.8 Hewlett-Packard (HWP) 65 1/4 19.2 1.25 1.5 11.9 IBM (IBM) 157 7/16 21.0 1.55 1.8 3.7 Micron Electronics (MUEI) 22 5/8 24.6 1.07 1.2 1.0 Based on these figures, Dell and Gateway remain the two best buys in the group... Much was made Friday of Dell's relatively high p/s ratio but compare sales growth rates and the stock is "cheap" relative to IBM, MUEI, AAPL... Gateway simply scores the best across the board and would be our top choice based on value... CPQ also seems slightly undervalued at current prices... IBM clearly is overpriced relative to its peers and Apple needs to show it can grow revenues (company has posted yr/yr sales declines in each of its last eight quarters) before we want any part of it... Micron and Hewlett appear to be fairly valued near current levels.

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