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 Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (75887)	10/30/1998 4:29:00 PM
From: Lee	Read Replies (1) \| Respond to of 176387

Hi Mohan,..Re:<South Korean economy>Is the crisis ending? Thanks for the article. Looks like they're turning things around. We've also heard rumors that Thailand is as well. Let's just hope Japan stays on track and then we might be hearing the same thing out of them next year at this time. Happy Halloween, (you think the bears are spooked now?) LOL Lee

To: Mohan Marette who wrote (75887)	10/30/1998 4:31:00 PM
From: jhg_in_kc	Read Replies (2) \| Respond to of 176387

SMARTMONEY ONLINE: Addicted To Dell--Mohan, I think we are hooked too. NEW YORK (Dow Jones)--Life without Dell (DELL)? That would be like the St. Louis Cardinals without Mark McGwire. The Chicago Bulls sans Michael Jordan. Goldman Sachs without Abby Cohen. It's no coincidence that three of the top five funds of the year (with more than $100 million in total assets) - Fidelity Select Computers (FDCPX), Janus Twenty (JAVLX), and Idex Growth (TIDEX) - are also three of the top 10 largest holders of the super computer stock. With Dell up an incredible 207.8% year-to-date, winning fund managers have not only let their Dell stakes appreciate, but they?ve added to their positions. The No. 1 fund Fidelity Select Computers (up 47.2% year-to-date) has increased its stake from 7.2% last October to over 15.4% today. Meanwhile, Nos. 3 and 4 - Janus Twenty and Idex Growth - have upped the ante to 10% and 13.8% respectively. Even in No. 2 fund Rydex OTC (RYOCX), which passively indexes the Nasdaq 100, Dell's stake has grown like a weed. But what would life be like for these funds without their precious Dell? We decided to find out. After examining 1998?s earliest semiannual reports for the funds, we tracked the performance of their top five stocks throughout the year. (Unfortunately, since many fund companies only report complete share data two to four times a year, this method leads to certain inaccuracies. But, if anything, our results underestimate Dell's impact because each fund has increased its position throughout the year.) The results prove that Dell is the clean-up batter in their lineups. For example, Fidelity Select Computers? Feb. 28 semiannual report indicates that the fund held 600,000 shares of Dell, 1,679,000 shares of EMC (EMC), 1,947,000 shares of Quantum (QNTM) and 1,064,600 shares of Compaq (CPQ). At the start of the year, those shares were worth a total of $191.5 million. As of Oct. 26, $362.1 million. Total return for the five: 89.1%. Without Dell: 50.4%. Dell's shares exploded in value from $50.4 million to $150 million. Similar results were found for Janus Twenty and Idex Growth. With Dell, Janus' top five had a 79.5% year-to-date return; without, 51.3%. Idex Growth's return difference was even more dramatic: with Dell, 71%; without, 38.9%. Scott Schoelzel, who manages both funds, acknowledged his indebtedness to the stock in Janus Twenty's April 30 semiannual report. He also pronounced his faith that the record-breaking performance will continue: "Dell serves as a model of efficiency and responsiveness in its industry. Unlike most of its competitors, the company. . .has a business model that continues to demonstrate superiority quarter after quarter." Manager Michael Tempero of Fidelity Select Computers sounds like he cribbed from Schoelzel in his latest report: "{Dell operates a very efficient model for selling computers. What I mean by that is that Dell is often able to underprice its competitors." But with Dell currently selling at 78 times trailing 12-month earnings, one wonders when these fund managers will say enough is enough. "With Select Computers you sort of expect it because it is a computer fund," says Russel Kinnel, editor of Morningstar Mutual Funds. "Schoelzel at Janus operates a concentrated fund and has a history of letting his winners run. But that kind of attitude has driven up his P/E ratios. We've got a 48 average P/E on his fund. That's amazing! It's almost 50% higher than the average large-cap growth fund.' And is Dell really worth it? "Dell has a strong brand name, but it doesn?t quite have the lock on the market that Intel (INTC) and Microsoft (MSFT) have," notes Kinnel. Morningstar's Dell analyst Haywood Kelly echoes Kinnel: "Dell's in a commodity market with a lot of competition. If we have a recession, how recession proof is it? At its current valuation, I don't think it is." Although Dell has consistently beaten its earnings estimates for the past 12 quarters, maybe it's time for these overzealous fund managers to reconsider. Or at least reduce their positions. After all, even Mark McGwire can't carry the whole team. For more information and analysis of companies and mutual funds, visit SmartMoney Interactive at smartmoney.com More about Dell Computer Corp.: From leading business publications From The Wall Street Journal Powered by Quote Agent® and News Agent® from IDD Information Services Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved. Personal Path