Jeff,
RE: .what do you think will drive the price of Dell to 50?
TA view
First, I think that DELL is under priced. If you just look at a one year chart on DELL quote.yahoo.com and draw a nice line across the bottoms, you might expect the BOTTOM of the channel to rise to around 50 by mid May. I know that past performance is no guarantee of future performance.
However, I believe it is a measure of a management team. I find that they have integrity. Thats why my major investment portfolio is 100% DELL.
Company Initiatives
The fundamentals add significantly to the equation.
I believe that DELL earnings will confirm that they are stealing market share like crazy from CPQ IBM and HP. Over the next couple quarters, the PIII sales will be key along with increases overseas (can you say China? Stretch goal {see stockman scott posthttps://www.siliconinvestor.com/readmsg.aspx?msgid=8972841} by Tom Meridith to have 50% of sales from overseas - WOW). Servers will be hitting on all cylinders this quarter {plans to add another even bigger server plant means that they think they need it - look for DELL to be #2 in world next year in Servers}. Plus, after the bruising associated with revenues last Q, I expect that DELL got even more aggressive on the corporate bidding. For example, our shop was an HP house and now there are boxes with DELL showing up in the mail room... (HMMMMM). Don't think it is corporate wide yet, but haven't seen any announcements.
In addition, I don't think the analysts have factored in Gigabuys, a possible 2nd place world wide finish in storage this year and the heavy move into Consumer end PC (which will hit next quarter and the 3rd quarter), confirming that DELL is the company that can innovate to bring the growth.
This all adds up to a easy pop back into the 50s. Maybe a shot at a new high in the next couple months. We all agree that the parabolic curve leading up to the last earnings announcement/split was unsustainable. However, I think this is the time to be moving back in a positive direction. Options expiration tends to push the price down. Then the market moves up so "they" can sell some expensive calls to us again.
JMHO,
Craig |
