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

To: Sonki who wrote (63839)	9/5/1998 2:58:00 PM
From: larry	Read Replies (1) \| Respond to of 176387

Sonki, I think that DELL's trailing earning is 1.69, instead of 1.65 shown on the Yahoo! site. I got this number from several other services, like first call, Zacks. Do you have any insight on the difference? DELL is projected to earn 2.78 for FY 99, which would give DELL a forward PE of a little less than 40 using current stock price. My prediction is that DELL probably is going to round up with 2.90. Anyway, DELL is not cheap for sure, but it all depends whether people want to pay a high premium for a company that has a super history of earning and revenue growth, who also happens to be a leader in its sector. BTW, compared with MSFT, CSCO, and LU, DELL is not expensive, especially considering that its growth rate is almost twice as much as those industry leaders. larry!

To: Sonki who wrote (63839)	9/5/1998 3:35:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

Sonki, I do detailed projections for companies in which I invest. I try to get a good grasp of their competitive position and the strength and honesty of management. This provides a basis for the development of a perceived value of its future prospects. If I were daytrading I would want to have this kind of insight available. To simply try to trade the mood swings of the market without a good grasp of the fundamentals seems like a fools mission. INTC trades in the 18-28 PE range because that is the range of perceived earnings growth. If DELL traded at its earnings growth rate YOY we would get the following stock price: 72 X 4 X .5 = $144/share Remember Greenspan's speech did not mention past earning but rather future earning as being the basis of the value of the stock. This is the fallacy of using the trailing earnings as a basis for the determination of the appropriate P/E. Thus a better way to determine stock value is to forecast the earnings over the next year and then to apply the present value formula to determine the fair value of the stock. Jim Kelley