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

To: kemble s. matter who wrote (140859)	8/28/1999 8:14:00 PM
From: Sam Bose	Read Replies (3) \| Respond to of 176387

DELL Attacked by Barron's (Abelson), AGAIN!!! Hi Kemble and Thread, thought I'd post the following from Monday's Barron's that I just received. The arguments expressed I believe have too many holes to mention, and present the same old bearish case that has been used to no avail over the years. Anyway, a penny for your collective thoughts (maybe a share or two of DELL?!) Best Wishes, Sam ************************************************************ ......The inexorable decline in price is the basis of a simple but trenchant bearish argument on Dell and Gateway by William Lyons in the latest edition of his Short on Value newsletter. Citing Merrill Lynch estimates that PC prices will decline 11.5% for all of this year and 12.1% next, Will notes that Dell, the most profitable of the box makers, had a pretax profit margin of only 10.8% in the first quarter of the current fiscal year. If you knock 11.5% off the company's average revenues on every PC it sells, he reasons, you take a nasty bite out of those profit margins. And while Dell might be able to ease the pinch by shaving costs, ironically, there's not a whole lot of fat to trim because the company is so well managed. But no matter how well-managed Dell and Gateway are, and even if they gain market share as price pressures trigger an industry shakeout, Will concludes, neither company is destined to prove immune to "the powerful deflationary forces at work" in personal computers. Nor will their stocks prove immune to the impact of a remorseless margin squeeze. Especially when those stocks sport the kind of multiples this pair does-namely, 35 for Gateway and comfortably over 60 for Dell.