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

To: Fangorn who wrote (147282)	11/12/1999 12:09:00 PM
From: Ian@SI	Read Replies (1) \| Respond to of 176387

Updated: 12-Nov-99 Dell Does It Again Despite supply constraints, higher component costs and the Y2K bug, Dell Computer (DELL 43 7/16) delivered yet another quarter of impressive growth. After Thursday's close, the PC giant reported Q3 earnings of $0.18 per share on revenues of $6.8 bln. These figures represent improvements of 28.6% and 41% over year-ago results. That top- and bottom-line results merely met Wall Street expectations shows just how high the bar was set for Dell - even during a difficult quarter. Considering the obstacles Dell had to overcome, however, investors reacted positively to the as expected number and bid the stock up more than one point in after hours trading. Will the stock be able to sustain its momentum and finally begin participating in the tech rally, or will supply and Y2K concerns resurface and doom the stock to another few months of range bound trading? Unfortunately, Briefing.com doesn't know the answer to that question. What we do know is that Dell Computer is simply the best managed PC company in the world today. And while the PC industry may no longer be the sexiest area in the tech universe, Dell has proven quarter after quarter that it can grow its business at a rate far superior to its industry and the market. In fact, you will be hard pressed to find another company with annualized revenues of $25 bln that is growing its top-line by 40%. It's an amazing testament to Dell's products, service, management and business model. What's more, the company expects to post similar numbers in Q4, and the year ahead. Bolstered by strength in its high-end server business, by expansion into the small-business and consumer markets, by tremendous growth opportunities in international markets, and by continued growth in its online business, Briefing.com expects DELL to continue stealing market share from its less savvy competitors and to deliver on the promise of 35%-40% growth in FY01. If we are right, then DELL should have no trouble living up to current consensus estimate for FY01 of $1.02. Though a projected p/e of 42.6x isn't exactly cheap, it isn't all that high when you consider the company is expected to post average annual earnings growth of 33.1% over the next 5-yrs. In fact, Dell's p/e to growth ratio (or PEG) of 1.29 is lower than that presently accorded slower growers such as Gateway (1.76), Hewlett-Packard (1.35) and IBM (1.76). Don't know about you, but Briefing.com sees no logical reason why DELL should trade at a discount to any of these companies given Dell's superior management, earnings record and financials. To the contrary, as Y2K fears abate and supply constraints ease, we expect DELL to achieve a PEG of at least 1.75 for a 6- to 12-month price target of $60. Exactly when the marketplace will buy back into Dell's amazing growth story we don't know. But experience tells us that over time, the well managed, financially strong, fast growing, industry leading companies outperform the market. It's why Dell was, and is, a Briefing.com "Core" candidate.