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

To: D.J.Smyth who wrote (150284)	1/4/2000 4:33:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Let's take this stuff from Merrill apart: Dell Computer Corp. faces difficulty managing profit margins amid high component costs during its current quarter ending later this month, posing risk to its capacity to meet expectations, a Merrill Lynch analyst said on Tuesday. So what else is new? Fortuna is describing a short term potential problem (since component costs have been easing). He goes on to say: that he believed that the computer maker was well-positioned for long-term growth but that recent share price gains should not be construed as meaning "Q4 (fourth quarter) is without risk." Again, so what else is new? What company is without risk? Dell shares have risen over the past couple of weeks for no apparent reason, in our view," the analyst said. So maybe Fortuna believes that the tech runup over the last couple of months had reason? Would Mr. Fortuna care to share reason concerning runups in YHOO? We believe the quarter rests entirely on how well the company can fine tune its customer segment pricing so as to rebuild gross margins without materially impacting the top-line, -- He said Dell management had one of two options. One is to be less aggressive on PC pricing in order to shore up profitability and risk missing a possible fiscal first quarter buying boom as Microsoft releases its Windows 2000 system. -- The second option would be to follow the company's normal pricing policy, but this would likely prevent the company from meeting Wall Street's current fourth quarter consensus earnings estimate for Dell, he said. -- If the company were to miss meeting fourth quarter expectations, it most likely would be due to lower gross margins rather than failure to meet revenue growth estimates. Fortuna has estimated per share earnings of 20 cents for Dell's fourth quarter ending later in January, which is a penny below the 21 cent consensus estimate of analysts surveyed by First Call. It seems to me the the whole issue is the possibility of a one quarter earnings disappointment vs. the probability of strong long-term growth. I think this kind of short-term focus and the reaction it generates from investors speaks volumes about us as investors. Lest we forget, Dell is one of the fastest growing companies in the US, and it accomplishes this feat while simultaneously generating exceptional cash flow. And that is the result of nothing short of masterful execution of a brilliant business plan. But what do I know?