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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Chris K. who wrote (2415)	2/10/1999 5:26:00 AM
From: Bilow	Read Replies (3) \| Respond to of 2578

Hi Chris K. I seem to be the last surviving DELL bear, (partly due to my prediction of the stock's demise being a very long range one, but mostly due to my not putting any money on it). So it may be up to me to respond to your question about what happens with DELL earnings. I believe that DELL generally beats its estimates soundly, but that the stock frequently dives after earnings announcement regardless. This dive is usually preceded, however, by a rise up to the earnings release date. This is probably due to analysts getting a better idea of what earnings will be than the published numbers. They then buy the stock early, driving the price up. When the earnings are released, the trade is completed by a sale, which drives the price back down somewhat (but not back as low as before it started its rise). Given that DELL has risen substantially in the last month, I would guess you would see a reaction drop on release of earnings figures. In the unlikely event that they miss earnings, you could see a substantial move. DELL trades at a very high multiple of earnings. This is due partly due to the bubble nature of the current stock market, and partly due to DELL's ability to increase earnings in the past. If you want to appreciate the percentage of DELL's stock price growth that is due to the bubble, try comparing the growth rate in DELL's earnings per share to the growth rate in the stock price over the last few years. I believe you will find that the stock has appreciated many times faster than the amount of business, or the profitability of that business. Compared to valuations of two years ago, DELL is overpriced something like 3X. -- Carl