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

To: John Chen who wrote (81092)	11/18/1998 10:08:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

John: if I were you I'll ignore the price 'objective' and look at the other stuff.Remember they only have an 'accumulate' rating which probably means when DELL gets to $80.00 they most likely will issue a 'strong buy' or 'buy' at least, assuming of course DELL delivers as usual which normally is better than analysts' estimates. You may be right about the split thing,if things are moving according to DELL's plans in 12 months we could very well be sitting on $80.00 after the split.<g> Also note ML has a long term 'BUY' on the stock with an 'Accumulate',I don't know what that really means,probably short term or intermediate term 'accumulate'.What the heck is that, you accumulate right now and then 'buy' later!!!!! Probably buy with both hands at $80.00,accumulate with one hand right now.<g>

To: John Chen who wrote (81092)	11/18/1998 10:40:00 AM
From: secrus2	Respond to of 176387

So strange if DELL can generate that growth rate to rise to $80 only. Patience and we'll see more.

To: John Chen who wrote (81092)	11/18/1998 11:17:00 AM
From: Mohan Marette	Respond to of 176387

Merril on DELL-Part deux. Subject:Outlook-STAYING FOCUSED. John: Now this you pay attention to as it pertains to the future prospects of DELL as Merril Lynch sees it. ========================================================= Excerpts: (courtesy) Merrill Lynch Report Dated 13 Nov.1998 by: Steven Milunovich,CFA & Kirsten Campbell (Industry analyst) 'Outlook: Staying Focused' ...'Our F2000 estimate of $1.45 assumes 37% revenue growth and downtick in net margin. Management was bullish regarding demand going forward.Industry unit growth of 14-15% seems reasonable to us;of course,Dell's challenge is to keep outgrowing the industry by leaps and bounds.Its 9% worldwide market share and move into higher-end systems suggests that a 40% type of revenue increase next year should be achievable.Y2K is a wildcard-a Dell survey indicated that half of CIOs will spend more next year to become compliant.The company expects large corporations to upgrade PCs in the first half.The government and small businesses are expected to upgrade in the second half,according to CEO Michael Dell.We agree that the first half should be enhanced but a slowdown in the second half seem entirely possible. Dell said that the net margin might fall from its recent 7.9-8% level as the company gets price aggressive to grow faster.Efficiencies from using the internet can be used to boost share.We have assumed a net margin decline to 7.7%;our hunch is that such a reduction could mean higher revenue than our estimate of 25.6 billion. Simple is hard. Dell's model probably looks alluringly simple to indirect competitors.Compaq,IBM and HP are finding they must adopt direct selling to some degree to compete. Compaq's latest volley using an agent model is unlikely to slow DELL,in our view. Behind the simple proposition of direct selling is a complex infrastructure that DELL had developed over 15 years. In addition,Dell's service advantage may be a greater differentiator than its 10-15% cost advantage. Dell has everything we like in a tech company.Especially focus. Dell does nothing but PCs.Direct selling (the nail) is the tactic that management has driven home with its strategy (the hammer).Dell doesn't even need the best product or price anymore because it is starting to own the PC space in buyers' minds. The company has never done an aquisition,choosing a virtual approach instead. Finally,Dell is moving into the enterprise over time,a higher-margin business.The attack from below usually works in technology.Finally,the Internet is the nail in the indirect coffin.Dell is likely right in believing that the benefit of the Internet will offset any success the indirect vendors have in narrowing the company's lead.' ================================================================ Of course you realize this is based on lot 'assumptions' and 'hunch' as Merril points out,so we will have take all this with a grain of salt.I think some of the assumptions are too low particularly with respect to Dell's rate of growth and there are other 'hunches' that may not go down well with ardent Dell investors who just might know more about the company than Merrill.<g> Anyway I believe, by and large, Merril may have found the keys that makes DELL tick and makes it a different company vis-a-vis its peers. Enjoy.