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

To: JRI who wrote (47848)	6/16/1998 7:20:00 PM
From: Jim Patterson	Read Replies (1) \| Respond to of 176387

RE: <<Not many companies felt much in Q4, Q1 saw tough EPS growth, and now Q2 is in trouble.>> Aren't overall earnings supposed to be better this quarter? John, I think this is one of the reasons the market is selling off right now. Seems Q2 numbers are going to leave a little to be desired. Though no one ever said they would be good. In most of the Q1 reports I read, All the analysts talked about was how 2H 98 was going to be better than H1 98. I think some investors forgot about Q2 numbers in between. Now for DELL, RE: I am really not interested in what happens to Coke, Seagate, or others... DELL is not opperating in a vacume. Every thing that happens every where will have an impact on DELL's sales. Take KO for instance. If KO's stock gets hammared because their earnings are contracting and the stock is over valued, Then the Dow will be weaker. A weaker market is not good for this economy. I think the US economy is being driven by the Market. A stumble in one will lead to a big stumble in the other. the market usualy leads by 6 months. If no new new high is reached, Expect Dramatic GDP slowing in Q4. DELL's stock looks possied to rally today. But you talk about their AP growth, I got news for you. It slowed from 80% to 35%. I don't care what the reason or the excuse or what other companies did. IT SLOWED, it can slow more. And this is growth driver ??? Companies with Growth slowing in reigions don't deserve to have expanding multiples. Now the US consumer and DELL, You say not important, but that could hit CPQ. Well in case you have not noticed, all of these price drops started with CPQ. More CPQ problems will lead to more Price declines. I know the DELL bulls love price cuts, but lower ASPs are a battle that no comapny can win. So the ultimate question is: What should we pay for a company in a comodity business, (I know, I know...lets just go ahead and admit it, PC's are comodities) where the general price trend is down, There is less and less reason to pay up for the high end, (where margins are better) (Gartner group recommends that a P II 266 is all the computer you need for most application and they will be in the $1,000 range by the 3rd Q) It is becomming more and more appearant than end user PC demand growth has slowed to single digits, Revenue growth in the industry may actualy be negative, BUT...The company is growing Revs @ 50% ? Today $84, about 12% less than a month or so ago. Should that stock price race ahead in anticipation of flawless reports? Should the stock be sold in a cautious panic? One thing is for certain, The environment that DELL is opperating in is becoming more hostile every day. This should at the very least make the company that fears nothing, consider the ultimate reality. Their stock will trade @ 10 times trailing earnings again. Jim