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

To: GVTucker who wrote (156945)	5/11/2000 8:43:00 AM
From: BBG	Respond to of 176387

Anyone else out there nervous? I am...but I'm staying long...GULP... The following sums it up pretty well... I like Nile's comments... He's been right on when it comes to DELL's performance the last couple of years... Suerte BBG Anxious PC Investors Await the Dell Tell By Thomas Lepri Staff Reporter 5/10/00 6:49 PM ET Investors who are concerned about the direction of the boxmakers would do well to tune into Dell's (DELL:Nasdaq - news - boards) first-quarter conference call Thursday night. The issue isn't Dell's earnings report, which the company is scheduled to release after the close of trading Thursday. While lingering effects of the Y2K hangover could lead to a bit of revenue softness, there's little fear that Dell will miss the consensus earnings estimate of 16 cents a share -- especially as the company is expected to realize another healthy gain from its considerable investment portfolio. So things should get a lot more interesting when Chairman Michael Dell starts talking. His remarks will address issues affecting nearly every company in a sector that has been severely pressured during the recent Nasdaq turmoil. The Philadelphia Stock Exchange Computer Boxmaker Index, once up 25%, has now lost 1.3% on the year. Dell hasn't escaped that trend, having lost 11.7% in 2000. Listen to What Demand Says Foremost among those issues is the outlook for corporate PC demand, which fell off a cliff in the beginning of this year to crimp the top lines of some Dell competitors. For all the talk about Compaq's (CPQ:NYSE - news - boards) improving corporate PC business, sales in that segment still declined 7% from last year. Gateway's (GTW:NYSE - news - boards) corporate sales fell 19% in the first quarter, and the company was able to make its estimates only because of a 27% gain in consumer sales and a burgeoning "beyond-the-box" operation. Most ominous was Microsoft's (MSFT:Nasdaq - news - boards) warning last month that weak sales of PCs to businesses would weigh on its next two quarters. Still, most analysts have remained sanguine about the corporate PC market, casting doubt on the motives for Microsoft's warning and stressing that demand will rebound as Windows 2000 gains acceptance and the Y2K lockdown on IT spending recedes into memory. "It's not like it's on fire," Robertson Stephens analyst Dan Niles says of the demand picture. "But it's definitely improving, which is good, given how bad it's been for the last six to nine months." Niles rates Dell a strong buy, and Robbie Stephens doesn't have an underwriting relationship with the company. Serious Exposure Dell investors had better hope Niles is right. The company depends on sales to businesses far more than any other boxmaker does. Dell sells less than 8% of PCs worldwide to consumers, according to International Data Corp. Not everyone agrees with the analyst community. One buy-sider harboring intense doubts about the strength of the corporate PC market is Fred Hickey, a prominent bear and editor of the High Tech Strategist newsletter. "The business market has been weak all year, and it hasn't picked up even through April," Hickey contends. "We've got reports from the business market that despite what the analysts said, business has not rebounded." That has Hickey, who owns puts on Dell and is "proud of it," ready for the worst. "I think Dell will be forced to lower guidance," he says. "If they don't, then they'll miss the number." First Call/Thomson Financial puts the consensus estimate for Dell's second-quarter earnings at 21 cents a share, representing a 9.5% increase from the year-ago 19 cents. Brass Tacks Most of the recent buzz about hardware shortages -- and there's no shortage of buzz, at least -- has focused on flash memory, a crucial component in cell phones and hand-held devices like Palm Pilots. But though DRAM prices have been much more stable than flash, industry analysts expect that could change late in the year. "We're very near saturation," says Mark Giudici, a Dataquest analyst who tracks the components industry. "In the past, any blips in price got adjusted for [by producers increasing capacity]. But we're getting to the point where there isn't any room for additional capacity to be brought on, so prices won't be adjusted back down." Dell's preferred-customer status with Intel (INTC:Nasdaq - news - boards) would give it priority over second-tier, white-box manufacturers if supplies get tight later this year. But pricing is another matter. At last week's Merrill Lynch technology conference in New York, Mark Topfer, counselor to Michael Dell and a Dell director, acknowledged that while Dell didn't expect to have any problem getting components, "potential price pressures" did exist. Indeed, the company's direct-sales strategy, and the attendant emphasis on maintaining low inventories, makes it vulnerable to any supply disruptions, which could threaten margins. The components outlook is dicey enough to have prompted SG Cowen analyst Richard Chu, who rates the stock a buy, to issue a note Wednesday raising the fear that "component pricing could tighten significantly and reignite gross margin pressure" at Dell. Nonetheless, "I think they're going to be fine," says a confident Niles. "I think they'll have a good outlook. And that's really the important thing."

To: GVTucker who wrote (156945)	5/11/2000 11:24:00 AM
From: TTOSBT	Respond to of 176387

Re: "If anyone is short DELL, today would be a good day to hedge that short with long calls." Very prudent advise from a very prudent poster. When do you suppose those short short's should COVER after tomorrows rise or now? If we get a good PPI -likely if oil prices down?- and Dell does .18c with a good CC we should see 50 again IMO. TTOSBT