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

To: PAL who wrote (102299)	2/17/1999 10:26:00 PM
From: Mohan Marette	Respond to of 176387

Is CPQ nibbling on Dell?WRONG 'kimosaby' says Richard Chu,Managing Director,Cowen&Co. Paul-san, Check this out interesting comments from Richard Chu,MD,Cowen & CO. I particularly liked Chu's comment about that 'popular' contention that Compaq is nibbling on Dell's business. =========================================== (Courtesy:Upside) Dell: Disappointing, Not Dead February 16, 1999 by Phil Harvey While some analysts and investors were fussing over what to wear to Dell Computer Corp.'s (DELL) funeral Tuesday, Michael Dell and company showed that slowed growth and imminent demise are two different things. Some analysts believe the company's got plenty of living to do. After two skeptical analyst comments last week, investors and Wall Street feared Dell would not beat its fourth-quarter earnings expectations. Instead, Dell met the Street's expectations dead on, reporting $0.31 per share for the quarter ending Jan. 29, 1999. And, with the company clocking Internet sales of $14 million per day, it's not exactly pushing up daisies. But it didn't perform like the superstar it was in the past. The company's reported quarterly revenue of $5.2 billion didn't live up to what most analysts expected. Obviously the company was expected to have some growth slowdown, says SG Cowen's managing director, Richard Chu. But Chu finds no reason to be alarmed by the results, based on the incredibly competitive PC landscape. On the contrary, Chu says SG Cowen maintains a "strong buy" rating on Dell because, despite recent investor doubts, the company's value proposition holds true. According to Zack's Investment Research Inc., Prudential Securities also showed some love last week as it reiterated its "strong buy" rating for Dell. Salomon Smith Barney Inc. represented naysayers in reiterating its "neutral--high risk" rating for the computer company. Along with slowing growth in corporate computer sales--Dell's bread and butter--many analysts are concerned that Compaq (CPQ) is nibbling away at Dell's customer base and gaining ground via its Internet sales. Wrong again, says Chu. "There's a big difference in making certain products available through direct sale and [having] a total direct-business model," he says. Instead of figuring out what to wear to Dell's funeral, investors should face the reality that Dell is a real business--a prisoner of market conditions, the economy, etc.--and it can't always toss out astonishing quarterly results. Even CEO Michael Dell noted in a company statement that tough competition underscores the need for improvement in his company's efficiency, long known as its strong suit. Now that the dreaded conference call is over, Dell can enjoy a two-for-one stock split--its seventh stock split in seven years. Once word of the split gets out, the company's stock may recover from the nearly 22-point drop it has suffered in February. Dell's definitely not dead, but its recent stock stomping may yet make it a little more humble. (Phil Harvey writes for Upside Today and welcomes your comments. Please send correspondence via e-mail (pharvey@upside.com) using plain text with no attached files.