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

To: jttmab who wrote (136966)	7/18/1999 9:02:00 AM
From: Calvin	Read Replies (1) \| Respond to of 176387

New internet domain registration for Dell: CAMPUSREADY.ORG companysleuth.com

To: jttmab who wrote (136966)	7/19/1999 1:29:00 AM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Jim, maximizing ROIC is not the name of the game. A high ROIC is a thing of beauty because it speaks to the efficiency of the operation. But what you really want is profit maximization, and you get that by investing your dollars at rates higher than the WACC. I don't believe anybody values businesses on the basis of ROIC, but it is a useful parameter for gauging business efficiency. Dell simply sitting on $4BB is silly because the cash not required for day to day operations is a wasted asset. It returns a paltry 5% or so. Now suppose that could be invested with an annual return of 20%. You would generate an incremental $600MM ((20%-5%) * 4BB) in profits, but would reduce ROIC in the process (depending, of course, on how you calculate ROIC). I am watching closely at how Dell manages all of that cash. TTFN, CTC