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Technology Stocks : Dell Technologies Inc.
DELL 122.55+4.4%Nov 21 3:59 PM EST
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To: Knighty Tin who wrote (103876)2/22/1999 5:35:00 PM
From: jim kelley  Read Replies (2) of 176387
 
MB,

DELL's stock price has been for the most part following its earning growth rate. If its earnings growth rate contracts then its PE is likely to contract. This is what in part caused the fall from 110 to 80 recently.

However, one quarter does not a trend make. If DELL can increase units sold this quarter by 264 K, it will resume its normal growth rate.
Is it possible for DELL to do this? I think the answer is yes. DELL appears to have come into Q1 with 100K units in its production pipe and it has reported closing its corporate bids last quarter at greater than a 50% rate. So it means that they have become very aggressive with their corporate customers in winning the bid.

I think the mistake that DELL made was in thinking that branding their product would yield a higher margin. I think branding just qualifies you to compete with the other brands in corporate circles. After that it is total package costs. TM and MD acknowledge this error in their art and have taken steps to remedy the problem.

The channel stuffing by CPQ and IBM will tend to work to DELL's
favor as the new INTC processors obsolete stale their inventory.

But DELL does have to put its numbers on the board.

JK

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