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

To: Chuzzlewit who wrote (67508)	9/25/1998 1:40:00 PM
From: Dell-icious	Read Replies (1) \| Respond to of 176387

All: this just out on thestreet.com: Top Stories: Delluva Quarter By Eric Moskowitz Staff Reporter 9/25/98 1:32 PM ET All systems are go! That is the message out of Dell's (DELL:Nasdaq) eagerly anticipated analyst meeting in Round Rock, Texas. Though PC average selling prices continue to come down and DRAM prices are strengthening this quarter, Dell "is still saying that its estimated 13% sequential growth rate is very doable," says Dan Niles, an analyst with BancBoston Robertson Stephens. By this reasoning, Dell will record at least $4.9 billion in revenue in its third quarter ending in November. Dell's average selling price has declined to $2,410 this July from $2,700 last year, and Niles says Dell's average price should drop a bit more to around $2,385 during the November quarter. Dell's top four executives, CEO Michael Dell, CFO Tom Meredith and Vice Chairmen Kevin Rollins and Mort Tofler, are all attending today's sessions with analysts, making it a can't-miss event for analysts and money managers. So far, the only thing skeptical investors looking for a chink in Dell's PC-plated armor can point to is that gross margins may have peaked last quarter. Niles, who has a market perform rating on Dell, believes Dell's gross margins will narrow slightly from the record levels of the second quarter. Robbie Stephens doesn't have an underwriting relationship with Dell. After Dell's second quarter, when the company reported record gross margins of 22.7%, "investors may be spoiled," says an analyst who requested anonymity because he hadn't completed a report on the conference he'll send to clients. "I don't think that the company will be able to match these levels for some time." The analyst has a buy rating on Dell and hasn't participated in any of the company's offerings. What should keep Dell's growth rates above the industry average, says Niles, are server and notebook sales, which are taking on increasing prominence in Dell's business. "Dell's server business is on fire," says Niles, who said the company said Thursday night that sales at its enterprise sales unit, which sells lucrative servers and workstations, should more than double from year-ago levels. And that probably will mark a decline from the second quarter's 136% sales growth at the unit. "This growth should offset declining ASPs that Dell has been seeing over the last year or so," says Niles. As long as Dell can maintain robust sales growth in the high-margin enterprise line, it should be able to stay out of the sub-$1,000 market and avoid a dogfight with price-chopping competitors such as Compaq (CPQ:NYSE) and Hewlett-Packard (HWP:NYSE). In terms of worldwide sales, Dell continues to see strength in North America and Europe, notes Niles, and some growth in Asia/Pacific, "but [CFO Tom] Meredith said it wasn't as much as Dell would like to see." Translation: Investors may see a dip in Asia/Pacific growth. Then again, Dell has proven quite a few doubters wrong before. The company reports third-quarter earnings the week of Nov. 16. thestreet.com

To: Chuzzlewit who wrote (67508)	9/25/1998 2:15:00 PM
From: jhg_in_kc	Read Replies (4) \| Respond to of 176387

Chuzz, Re Dell valuation ... This was posted to me from the Buffett thread. I can't believe he's looking at the same stock we are. What's wrong with his numbers?(I am an English major) jhg Let me give you my take on Dell's valuation. Granted this is a crude approach, but given the possible variations on the inputs, precision is not possible anyway. Assume PC sales presently around $150 billion grow 15% annually for 5 years to about $300 billion. (I think this is generous.) Assume Dell will have a 25% market share in 5 years. (This too is generous in my opinion) Assume Dell's return on this $75 billion in revenue is 6%. (Lower than present, but still high for a retailer) Assume Dell's $4.50 billion in income is divided among 1.6 billion shares (5% growth due to options exercise) This gives Dell an EPS in 5 years of $2.81. Assume an above average market multiple for a company in a moderately growing industry. I estimate 30 is appropriate. Dell's stock price in 5 years = $84/share. This equates to a yearly return of 5.2%. Just about the rate of T-Bills with many times the risk. -Robert

To: Chuzzlewit who wrote (67508)	9/25/1998 4:01:00 PM
From: On the QT	Respond to of 176387

Hi Chuzz, RE: "Buy and Hold" Appreciate your thoughts. My comment was: "Those that go strictly "Buy and Hold" need only the right stock". My view of effective "Buy and Hold" doesn't literally mean buy and hold to either make money or go down the tubes. That is why to protect my money, I always use a limit to my risk in investing in this stock in one form or another. However, I do not invest with a limit to what I can gain on my investment. One way to protect my investment is the kind of diligent review of the reasons that led me to believe the stock to be "right". History is replete with stocks that, were "right" for some and for the same some, who followed the stock to 'no where land', were very "wrong". As long as one believes it is the "right stock" it should belong in the "Buy and Hold" strategy. That is not to say that it does not belong in other strategies that also may or may not include "Buy and Hold". I am, as you may know, basically a long term player with short term trading in those stocks that I have a long term position. I am almost always working over my thinking.As long as my thinking is right for me, I'll continue to think along those lines. As long as my stock is "right" I'll continue to include it in my portfolio. Keep "Chuzzwiting". The fog clears when you scratch (at least long enough to provide a window of opportunity for some). Regards, QT