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

To: MichaelW who wrote (70286)	10/8/1998 11:23:00 AM
From: Craig Lieberman	Read Replies (2) \| Respond to of 176387

There is only one number that matters to the long term investor in these days of DOWN DOWN markets... How many shares of DELL do I own. If you own 100 shares what will that mean in 1 year? How about 1000,2000, 10000, or even 20000 shares. If you had an extra $100,000 cash right now, what stock would you buy? I would buy DELL in a second at these prices. lets go through the earnings numbers again. Lets say they report earnings at $1.43 year ending Feb 2000 like yahoo consensus estimates says. Lets look at the possibilities. sequential quarterly earnings in percentage terms for the last 4 quarters are up 15%, up 15%, up 15% up 10% (roughly). Lets say this continues as a pattern for the next few years starting at .27 which is the consensus for the next quarter. 98.............. 99............. 2000............ 2001...... Feb/May/Aug/Nov/ Feb/May/Aug/Nov/ Feb/May/Aug/Nov/ Feb/May/Aug/Nov .19,.21,.23,.27, .31,.35,.41,.45, .52,.59,.68,.75, .87,.99,1.14,$1.26 So trailing 4 quarters of earnings in Oct 2000 might be $2.24 With a VERY conservative trailing P/E of 30 gives share price of 67. 2 years from now. 48% in increase from here in 2 years. But DELL is growing at 50%/year so why doesn't it deserve at least a trailing P/E of 50? With such, the share price of $112/share in 2 years, purchased now at $45/share will represent an increase of 148% in 2 years. How about for 3 years in the future. Purchased now at $45/share what would the increase in share price be at various P/E ratios? With the above data for earnings(assume Oct 2001) - $3.75 trailing. trailing PE 20 - $75/share 67% increase in 3 years trailing PE 30 - $112/share 148% increase in 3 years trailing PE 40 - $150/share 233% increase in 3 years trailing PE 50 - $187/share 315% increase in 3 years This is why I bought this morning. Craig