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Technology Stocks : Dell Technologies Inc.
DELL 115.43-1.5%Jan 23 9:30 AM EST
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To: Chuzzlewit who wrote (114228)4/5/1999 2:57:00 AM
From: jim kelley  Read Replies (1) of 176388
 
True. They should be kept separate.

However, it looks like they have been making a killing on the stock buybacks. These are more massive than the ESOP.

Another topic which I think has been neglected is the potential for DELL to increase its competitive position by further reductions in SG&A and COGS. This is an extremely important issue. This will determine IMO the value of DELL stock in the coming year.

I think the economies of scale that they are getting from their rapid increases in unit sales should begin to show up in their COGS. The IBM royalties, MSFT licenses and component costs should be of considerable benefit this year.

If they hold their SG&A flat and their R&D flat they should be able to optimize the throughput of their factories and trade off the margins against volume.

If they do this then all they need to do this year is grow revenues by 40-50% and the stock will have excellent appreciation.

Regards,

Jim Kelley
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