Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: fred woodall who wrote (118)	3/12/1998 10:48:00 PM
From: jjs_ynot	Respond to of 2578

I think both stochastic and MACD indicate a downtrend in DELL. Unfortunately, the toolset I use still isn't corrected for the stock split so I am extrapolating from my previous TA. However, DELL had gotten 8 points over its 25 day MA on MACD of 12-25 with a 9 period indicator and stochastics had a picture perfect downturn on 14 day stochastics. From a fundamental standpoint, I have analyzed the likely scenarios going forward. I believe several things will happen between now and AUG. modest margin squeeze, slowdown in growth rate (DELL was able to pick up most of the incremental growth in PCs but now the market and Company are mature), P/E contraction to about 38-39 on prior year and 30 forward. I think DELL can maintain a 30 percent per year earnings growth rate, which is great since average company earnings over the next several years will grow at about 5 percent. This is 6 times average and is DELLs norm so they should be able to achieve that if they maintain there business model. Unfortunately the pressure is to an enterprise wide business solution of both servers and clients (PCs) for both software and hardware. CPQ has recognized this and DELL doesn't appear to have gotten the picture yet, but they may have since they are talking about OEMing Data General equipment. JAVA and thin client / fat server architecture also is a possible problem for DELL. Anyway those are a few factors that went into my calculations of DELL for the next 12 months: Message 3688148 Discussing the downside of DELL seems to make one a pariah on SI, so be warned. There are a lot of zealous supporters. I really need to spend about 5 hours sometime to lay down in detail the calculations that I did in formulating my DELL projections. Just been too busy. Dave