Hi Mohan,
This is what they're saying about Dell today:
By Eric Auchard NEW YORK, Feb 1 (Reuters) - Dell Computer Corp. DELL.O
shares spiraled upward nearly $10 in frantic trading on Monday
amid speculation the fast-growing direct supplier of personal
computers was poised to split its stock in coming weeks.
Analysts said options traders and momentum traders have
been attracted to Dell by rumors of a stock split, possibly
two-for-one, and buoyed by a string of positive reports showing
Dell's quarterly growth continuing to outpace the rest of theindustry.
Investors piling into the stock took Dell a new record high
of $108.12, up $8.12 for the day Monday, as nearly 43 million
shares changed hands on the Nasdaq stock market.
"Now the central theme is that any stock that approaches
$100 is going to split," said Piper Jaffray analyst Ashok
Kumar, who questions the strength of Dell growth recently.
"Should that be the reason for a split? Absolutely not."
"I think it's more about the stock split than about a
possible upside to the quarter," Bear Stearns analyst Andy Neff
said of the main rumors fueling the stock's dramatic rise.
The Round Rock, Texas-based company is scheduled to release
fourth quarter results February 16. Analysts' earnings
projections average 31 cents per share compared to 21 cents in
the same fiscal quarter last year.
Kumar pointed to unusually heavy call-buying of Dell
options Friday as a sign of investor bullishness.
A possible stock split would follow moves by other leading
high-technology names like IBM, Microsoft and Oracle, who have
each moved to split their stock following recent strong share
price gains, feeding anticipation of more splits.
While typically seen as a moderately bullish expression of
a management's confidence in its business outlook, the
psychology of anticipated stock splits has taken on a life of
its own in the past month, sparking unprecedented run-ups.
SouthWest Securities analyst Cody Acree said rumors of a
stock split strengthened Dell's shares, already trading at
record levels based on positive reports from rivals IBM and
Compaq and industry surveys suggesting its is the industry'sgrowth leader.
"I think that that's enough given the strength we have seen
out of IBM and Compaq, as well the overall growth of the PCmarket," Acree said.
"Dell was the fastest grower of any top-tier company," the
analyst said, referring to fourth-quarter and 1998 year PC
shipment data issued by industry trackers International DataCorp and Dataquest.
IDC put Dell's growth in PC factory shipments worldwide at
56 percent for the three months ended in December 1998 compared
to the three months ended in December 1997. Its top three
rivals grew from 14 to 17 percent in the same period.
"Those things are enough to get momentum investors behindit," Acree said.
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