He had plenty more to say, including that Dell is not a great stock right now: (this excerpt from Herb Greenberg's column this morning):
Dinging Dell -- or for those who are not yet Delled out: Last March, Janus Twenty fund's Scott Schoelzel was quoted here explaining why he liked Dell (DELL:Nasdaq), which then was trading at around 30. Putting his money where his mouth is, Janus Twenty became one of Dell's largest holders. What's Schoelzel saying now? Yesterday he told me: "Needless to say, Dell kind of blew this quarter (by their own admission). The situation is very, very confusing and we have lots of differing opinions, even within our own shop.
"Speaking only for myself, I am pleasantly surprised the stock is only down 8. I expected more pain. I also expect the company to be in repurchasing shares on Friday [after a 48-hour SEC blackout following earnings] and this will probably help stabilize the situation a little bit.
"As for the fundamentals, it's controversial, but I believe they signed a number of corporate accounts in November and December, and they expected/projected certain volumes to ship to those customers in January. Simultaneously, they decided to keep pricing firm at the start of the new year, believing they had a pretty good read on the quarter (which is why gross margins were higher than most expected). Then, as January progressed (third week), it was clear that they had simply misjudged the early ramp rate of some of their newer corporate customers and it was too late to go back and lower prices, thus stimulating the incremental demand necessary to make the revenue line for the quarter.
"Lot of 'ifs' and conjecture but I think this is accurate. They know they got off their game and I hope this reintensifies the effort out of Austin. I still believe the model is systemically advantaged vs. their competitors (six days of inventory vs. Compaq's (CPQ:NYSE) 56, channel included) and they still grew units in excess of 50% for something like the 11th straight quarter!
"Nevertheless, the bears will have plenty to chew on for a while. Still a good company, good management, but probably not a great stock ... for a while."
Thanks, Scott. (Wouldn't say whether he has been a buyer, a seller or neither.) Dell won't comment on a possible stock repurchase, and says the rest of Schoelzel's comments are consistent with what it's been saying.
|
