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Technology Stocks : Dell Technologies Inc.
DELL 117.44-1.6%Nov 20 3:59 PM EST
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To: Jill who wrote (114246)4/6/1999 12:28:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Jill, the operant question is bad quarters from whose perspective, and in what sense. The fact that the stock moved lower after earnings were announced is indicative of a disappointing quarter to those who sold.

Consider for a moment the people who tend to ignore AMD and Cyrix chips because these operations are not making money. That may be, but the important point is that they are siphoning sales away Intel, and so they are hurting Intel. In the same sense, Dell rivals are undoubted trying to take market from Dell. So the question really turns to the issue of management effectiveness.

I think what we really need to do is to ignore the disjunction between stock prices and business performance, and focus instead on the quality of management. I have spent the last several weeks doing exhaustive financial analysis on internet stocks. In the course of that analysis I have identified two parameters which I believe are key to running an "ideal" business. The parameters are not forward-looking -- they are simply designed to test how good a job management is doing given the tools at its disposal. The metrics I like are ROIC and and CCC. And what I discovered is this: Dell comes out on top of all of the stocks I follow in those two categories.

These parameters are not accidental, nor are they ephemera -- I expect their influence to persist for some time. But what excites me most is that I see Dell extending this kind of lean organizational philosophy to new markets

That's why I invest in Dell.

TTFN,
CTC
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