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

To: Chuzzlewit who wrote (99207)	2/14/1999 3:23:00 PM
From: kendall harmon	Read Replies (1) \| Respond to of 176387

Yahoo post on Barron's DELL comments: Here is the text from Barron's: The Dell debacle Friday wasn't spurred by any momentous announcement by the company. What happened was that an analyst at BancBoston Robertson Stephens, Daniel Niles, put out a note saying that Dell had a "soft" finish to its latest quarter, which ended January 31. The result, Niles predicted, was that Dell's revenues would total $5.2 billion for the three months, below his original expectation of $5.5 billion. Niles left his fourth-quarter profit estimate unchanged at 31 cents, but his concerns about "intensified" competitive pressure in the personal-computer market jolted Dell's stock. Dell has risen ninefold in the past few years, not because it makes demonstrably better PCs than Compaq Computer or IBM, but because of its highly successful direct sales approach. But with Compaq, IBM and Hewlett-Packard now gunning for Dell and seeking to emulate its selling style, Dell's edge may be dulling. Dell stock is vulnerable to any evidence of an eroding competitive edge because of its high multiple. Before its drop Friday, Dell was trading at 100 times estimated profits in its just-concluded fiscal year and at 72 times projected 1999 earnings. For the week, Dell was off 11 1/2 to 89 7/8, but it's still up 22% in 1999. The Dell drama should resume Tuesday when the company is due to report its quarterly results. My comments: 1) I don't believe there is any basis for a conjecture that Dell's sales slowed during the end of the 4th quarter, unless that evidence came directly from Dell Computer. It conflicts with evidence from recent market survey data showing Dell unit shipments in Europe increased 72% in 98Q4 vs 97Q4. 2) The nature of "competitive pressure" apparently isn't understood either by this analyst or by Barron's, which has run cover stores predicting the end of growth in the PC market in the past. 3) Nor is the value-added which Dell ships and Compaq or IBM or HP does not ship, such as preloaded software network-ready or the ability to drop-ship large orders to multiple locations, understood by Barron's. 4) What is obvious, though, is that the record PE has a lot of people worried, ready to jump ship at the first indication that "the end is near." A PE higher than EPS growth rate results from psychology, not financial analysis. So increased volatility and speculation should be expected if the market doesn't gradually lower DELLs PE as market share rises. 5) When the earnings release comes out Tuesday after the market closes I won't be surprised to see solid sales and net margin growth, in line with or above the consensus. mr sw hw guy

To: Chuzzlewit who wrote (99207)	2/14/1999 3:30:00 PM
From: kendall harmon	Read Replies (1) \| Respond to of 176387

More from Yahoo on Barron's: Page 3: "The cracks on the technology sector are starting to be quite visible. On Friday, for example, DELL tumbled 12 points. The excuse was that some rather vague reservations voiced by a couple of analysts, the gist of which is that DELL faces competition. What a revelation!" Page F6: "The best companies are seriously competitive outfits getting a lift from deep-seated changes in the economy and consumer behaviour - secular changes, in Wall Street-speak. That's why own INTC and not AMD, that's why I own DELL not CPQ". Page MW3: "Niles left his 4th quarter estimate unchanged at 31 cents, but his concerns about intensified competitive pressure in the personal-computer market jolted DELL's stock." ___________________ Last night I went for dinner with a friend who manages an account of $125,000,000 at one of the large brokerage firms, and he told me that they loaded up on DELL at the close, at $90. They believe that a lot of the news from Friday was misleading, somewhat false, and the street exagerately over reacted. He told me that what those "analysts" did was perfectly legal since it's very difficult to prove that it was stock manipulation; however, he also said that when stuff like that happens, the SEC always investigates to see if they themselves sold before the announcement or bought after the drop. That relates very much to "insider trading" and can be considered stock manipulation. Analysts get more info. and before everyone else does, because they get to see the books at the company ahead of earnings. Yes, it's an unfair advantage but there's nothing we can do about it. I bought the Feb. 90 puts at $4 on Friday about an hour before the close. I will sell those puts on a daily dip and defenitely before the close. Tuesday will be an extremely volatile day like no other, specially for DELL. Day traders will be playing it, large institutions will be playing it, I'll be playing it. My prediction is that we'll see the heaviest volume on DELL's history. The article from page MW3 on Barron's says at the end "The DELL drama should resume Tuesday when the company is due to report it's quarterly results". Anyway, happy trading and GO DELL BUM