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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Mehitabel who wrote (135427)	7/2/1999 9:15:00 PM
From: DO$Kapital	Respond to of 176387

<<<The INVESTools Advisory, June 28 - July 2, 1999 By John Brobst, Editorial Director, INVESTools.com 1. Dell on the Rebound (DELL) The stock market may be careening back and forth. But many stocks with strong fundamentals are chalking up impressive gains regardless of which the way the wind is blowing today. Option investing guru Bernie Schaeffer is currently betting on a number of such name-brand stocks, including five high tech leaders who recently beat analyst earnings estimates. One of these is Dell Computer (DELL), who beat analyst estimates in five of the past six quarters. The leading direct marketer is arguably the number one maker of IBM-compatible personal computers in the US. Schaeffer reports that the stock is making a comeback and gained 25% since a June 2 bottom. This pushed up the stock's 10-day and 20-day moving averages. Both have supported the stock since May, and the trend lines recently crossed indicating bullish times ahead to Schaeffer. Also in Dell's favor is a new all-time high in the PHLX Box Maker Index, which should boost major players. Option investors as a whole are pessimistic about hardware makers, and the contrarian Schaeffer sees as another bullish sign. "Wall Street appears to be somewhat wary of Dell," Schaeffer says, noting that 11 out of 31 analysts covering the stock give it a 'hold' rating. Schaeffer recommends buying the November 35 call (DLQKG). For more on Bernie Schaeffer's recommendation see "Aggressive Portfolio," July 1999, The Option Advisor. Bernie Schaeffer provides practical options recommendations that are simple to understand and execute. >>>> Comments anyone?

To: Mehitabel who wrote (135427)	7/2/1999 10:10:00 PM
From: Meathead	Read Replies (3) \| Respond to of 176387

Hi Mehitabel, Sorry, I tend to agree with most of the article. I wouldn't exactly the PC industry is going in a downward spiral from here however, but these shifts will have a strong affect on HW/SW companies strategies going forward. The PC will become a smaller portion of a very large and growing technology marketplace. Growth in other areas will offset basic PC saturation. The PC market they refer to today will look a lot different in 5yrs and include an increasing number of device classes. There are several things to keep in perspective when we look at Dell's future in all of this however. First, the industry's HW revenue pie will be around $250B in 2002 and could stay flat through 2005. This represents a HUGE amount of business no matter how you look at it. Dell is in perfect position to increase their market share from 10% today to 30% as they become the premier beneficiary of consolidation. We have IBM and HWP questioning whether they should even stay in this business and we have Compaq in serious, serious trouble. Dell could usurp much of this business if current trends continue. Second, Dell will continue to aggressively target higher end hardware and customers. A few years out, about $80B of the $250B pie will come from higher margin portables, servers, workstations and storage. Dell's goal is to increase the HW mix to > 50%, up from 40% today for these higher end products. Third, there are numerous opportunities in services and ecommerce that Dell will be pursuing. By 2005, it's likely that only 60% of Dell's revenue will be generated from Desktops, servers, storage etc. What might Dells income statement look like by then? Desktops=25%, Portables/SHD's=15%, Enterprise=20%, Services=25%, Other=15%.... revenues ~$100B. Fourth, the trends outlined in the economist article take time to develop... they are happening, but won't ruin the business of selling PC's overnight. Furthermore, the continued explosion of internet growth ensures that the backbone is still a work in progress where lots of hardware will be needed for quite some time. Fifth, many analysts and critics are seriously underestimating the immaturity of the PC platform, where it will be in 5yrs and how it will be used differently in the home and expanded in business applications. Likely all of the 300M PC's on the planet today will need to be replaced yet again... as the number of PC's in use swells to over 1 billion. It will be necessary for corporations to upgrade to stay competitive and consumers wont be able to resist. To be sure, in 5 years, the average desktop will cost about $500, will be 30 TIMES faster and more powerful than today's $1000 PC. Also, many of the new must-have technologies that are only on a roadmap and in the minds of standards committies today will be a reality on the PC of tomorrow. Sixth, for the priviledged sect of Americans, our homes will be run by servers. 30% of American homes will have a home network and a flotilla of web access devices... these will be totally new classes of hardware devices that don't exist today. I guess I could go on and on. These are just a few of the many new technological trends and opportunities that Dell will exploit to counter commoditization of the standard desktop PC. However, much to the chagrin of many threadsters, Dell won't participate in every single glamorous business opportunity under the sun nor will they engage in mergers or acquisitions. MEATHEAD