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

To: Meathead who wrote (25876)	12/19/1997 7:26:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

Just posting what I saw. True or not I can't say. Meathead & thread: Friday, December 19, 1997 Dell shares off $2.75 on demand concerns Friday December 19 2:18pm Eric C. Fleming, ZD Inter@ctive Investor Shares of direct computer maker Dell Computer Corp. slid $2.75 to $78.00 as investor concerns about Asia and declining domestic demand were exaggerated by the holiday sales push. Computer resellers, such as CompUSA Inc. and MicroAge Inc., may have signaled the slide last weak when their earnings were hurt by weakened demand. As these direct distributors to businesses are hurt by slack demand, it can indicate a softening across the industry that affects direct PC makers such as Gateway 2000 and Dell. Direct PC makers build computers without having a large number of assembled machines on hand and they use sales forecasts for their competition to gauge demand. If Dell's competition is forced to lower prices to clear out inventory, then Dell will be forced to match the price cuts. "With PC sales growth on the decline," said Daniel Niles, BancAmerica Robertson Stephens analyst, "an investor can look at the valuations, and see that it may be time to get out [of the PC sector].

To: Meathead who wrote (25876)	12/29/1997 11:52:00 AM
From: Jim Patterson	Read Replies (2) \| Respond to of 176387

RE: You can't predict what it would take to maintain gross margins based on revenue and unit growth only, you need revenue and COGS. COGS is mainly a function of material and component prices. GM = (Rev-COGS)/Rev. Increasing revenue (units x ASP) does'nt tell you much about net margins either unless you know COGS. Sorry it has taken so long to respond, Hollidays you know. Dell computer, Michael Dell's famous last words will be "It is only 6% of sales." Well Dell works on about 7 % net +/- .5 Subtract 3% for the 50% drop in the Wan and the Ti Bot Ect... and 7 % turns to 4 %. That is a 40% drop in NET. Now you can use all of your fromulas and COGS and OPEX and GM and Ratio analysis and everything else. But also remember that the corolations between these things is not linear by any measure. Also when the Rev hit comes as fast as this one is going to, there is little time for management to adjust the opperating model. Jim