Preview of A Kumar's comments was on Nightly Business Report.
i.e. - 55P/E with slowing earnings growth rate makes the stock awfully expensive.
Maybe we should suggest that he look at what's been happening with CSCO and every other small cap that's made the transition to mid cap then large cap.
FWIW,
Ian.
05/18/99:Dell Computes Good Earnings Despite Stock Drop
SUSIE GHARIB: The stock of Dell Computer got hammered in after-hours
trading. It dropped 2 7/16, even though it was up almost a point during regular trading today. Just after the market closed, Dell reported good earnings, but not good enough for Wall Street: $0.16 a share, which was right in line with estimates. It was a powerful quarter for the computer powerhouse. Profits rose 42 percent, and 30 percent of those revenues came from Internet sales. But analysts say that the company's growth rate is slowing down, and gross margins
are under pressure as it enters the sub $1,000 computer market.
ASHOK KUMAR MANAGING DIR., U.S. BANK CORP. PIPER JAFFREY: I think
we are concerned given the high valuation that this stock currently trades at 55 times forward consensus numbers and any then you have slowing growth, and so a combination of that, the stock is richly valued, there is more downside risk than upside potential in this stock here.
GHARIB: But Ashok Kumar says that in the long run, Dell is still the best-positioned personal computer vendor in the long run.
Note the above statement was actually made by Ashok K., not Susie when the piece was telecast. |
