Abraves, I dislike Dell for several reasons. However, let me say they make a nice box and their service has improved greatly. However, I think the co. and the bloated stock, are in deep kimshee.
1. The growth in the pc industry is now negative. For the first time ever.
2. The growth is more negative in business boxes than consumer boxes. Dell is mostly the former. The negative growth is also more in the high end than the low end. Dell doesn't even have any of the latter.
3. Dell has been running lots of financial scams with buybacks, put warrants, etc., that only work when the stock is going up. If the stock goes down a little bit, it may keep on heading past fair value, which is about $22.
4. Dell has shown signs of strain, with a huge receivables trick last quarter to barely make their number and a bailing out of insiders. Will that be reflected this quarter in their report? I don't know. They have very aggressive accountants/future trustys, so you don't know when they will finally be forced to recognize reality.
5. With pc prices declining and component prices flat or rising, Dell is in an environment similar to when they fell on their face early in this decade.
6. The stock is priced for perfection to the 5th degree.
BTW, why be a high risk investor? It is better to be a high return investor.
MB |
