SB- Your brother is wrong. Whisper numbers are not taken from the upper end of the range of First Call's estimates....A sample look at whispernumbers (and First Call) for Dell for the last few quarters will show that...last quarter, whisper numbers for Dell ranged as high as .35 (no analyst was stupid enough to predict such a thing)....obviously, a ridiculous expectation for anyone familiar with the company...
Without going into all the details, it is clear that whisper numbers are subject to manipulation by those who have something to gain by a company missing/beating the consensus analyst number...Ironically, its birth is due to the "little game" played by analysts and company management in which consensus estimates have been kept (by some) too low in the past...hence, some sort of "adjustment" was needed (to get at the real number)...Problem is, the whisper number thing has now spun a bit out of control on some stocks...notably Dell..
If I were you, I would not be confident that Dell will meet the "whisper number"...it will likely be pumped up too high by those who have something to gain by Dell missing the number...Cooler (investor) heads will prevail however...Dell needs .33 this quarter (and a strong forward) to shake off this current Kumar-induced disease...BTW- He just raised his '99 estimates for Intel..maybe a sign of things to come?
If Dell makes .33 and has a strong forward....no sensible investor would abandon ship, and some will jump back in.....32 is not a death sentence, but we would have to put up with more Jim Patterson, and "a measured slowing of the growth rate" would come more en vogue...and the stock would most likely rise only modestly at best (until a better quarter comes along)..
Barring wierd world events, I think the current situation is pretty clear....Just wait until the net stocks crack (later this year)...If growth rates remain strong, Dell/Cisco will benefit without doubt from the flood of Venkie et al's hot net profits... |
