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

To: BGR who wrote (102407)	2/18/1999 10:04:00 AM
From: JRI	Read Replies (2) \| Respond to of 176387

A- Since I've been following Dell (over the last 5 quarters or so)...Dell has always sold off after earnings....(sometimes atarting before the earnings announcement): (A few of my numbers may be off, but they are close enough for comparision: Q4 '98: 110-81 (-26%) Q3 '98: 73-60 (-17.8%) Q2 '98: 139- 94 (-31.6) )...note, I am not including the intraday drop to 80,, Q1 '98: 98-77 (-21.4) Q4 '97: 70-61 (-12.8) Q3 '97: Don't have the figures, but I believe there was (as well) a nice sell-off... Its clear that the momentum guys get in (about 1 month before earnings), and leave slightly a little bit before.. This past quarter reminds me a little bit of Q1 '98....Dell reported .44...I believe it was "only" .02 above estimates...the thought was that Dell would/should have reported .03 above estimates....The stock was sold off right after earnings...Until then, Dell had rallied, while the rest of the Naz/Dow were sliding downward....So Dell get clobbered (sortof) completed the necessity of all the tech leaders getting taken out and shot...before a rally to newer highs could begin... Additionally, MD had made some "perceived" statements that the number was going to come in strong (and, I guess, some thought the number would be stronger than .44). Those comments came out in early April, in and around the analyst meeting... What I think happened then, (and now)...Going into the quiet period, MD only can see what the quarter looks like (ex-the final 2 weeks)...I believe that in Q1 '98 and Q4 '98, MD/Dell did not meet plan the final two weeks... After all, 200 million only represents 3.7% of 5.4B...not a great % to be off....But I agree with you, it does make one uncomfortable thinking that we don't have assurance about these final 2 weeks of the quarter (each quarter). Looks like we never will... Still, I feel fairly good here...Although we could see a little downside on the Naz (down over 10% from its highs)...I see a sideways market for the next couple weeks (probably some recovery here..next few days, and then down again) before a bigger rally...if these indeed would take place...that would give us a couple months of a flat Dow, and a sharp, 12-15% selloff in the Naz.. I haven't had a chance to look at the Naz over the past few years, but I believe if you look at a chart you would see (several) sharp selloffs on the Naz (lasting 3-4 weeks) about 2 times each year/18 months...I don't think you will see any (few) months-long downtrends,,the sell-offs happen pretty sharply (as well as the rises).. The Naz Big Boys have been hammered lately....so this downturn has not been (only) confined to Dell....Over the past few years, such a spot has always represented a buying opportunity for big-cap, liquid Naz stocks...although the absolute bottom may be another 5-7% for many of these stocks...timing a low can be dangeous...I am happy about getting EMC at 99... The other scenario is that this is the end game (Michael Burke is right!)..Nope, don't see that... Re Dell: Yes, I do have a little concern that Dell revenues dropped to 39% growth y-o-y (5.5B would have given us 47%, 5.4B would have given us 44%)...that would have met with my idea of Dell's revs growing in the mid-40's going forward...while maintaining earnings growth in the 50's....Dell slipped (a little) this past quarter, after being flawless for 8-10 straight quarters.. But I think the (long-term) investment community believes enough in Dell to give us some benefit of the doubt here...It will be important (after the announcement of strong "sales" pipeline, that Dell deliver in Q1...needs to be at least .01 above estimates, 40%+ rev growth (hopefully 45%), and 50% earnings growth...) That would be enough, in the short-term, for all to view Q4 '98 as a slip-up only, and not a severe crack in the growth machine... I'll have to get back to you on sub-1K...