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

To: Mohan Marette who wrote (108407)	3/8/1999 10:18:00 PM
From: KwanK	Respond to of 176387

From the Fool.com fool.com ==================================================================== <THE RULE MAKER PORTFOLIO> The Dell Debacle? By Al Levit (alanl@ix.netcom.com) Glendale, CA (March 8, 1999) -- The rumors of my death have been greatly exaggerated. -Sam Clemens (aka Mark Twain) Same here! -Michael Dell (February 16, 1999) Obviously, the second quote is not for real, but it could have been. It seems that Mr. Dell's company, Dell Computer Corp. (Nasdaq: DELL), committed an unpardonable sin on Wall Street last month. For the previous 17 quarters, Dell had announced earnings that beat, and often trounced, consensus analyst expectations. Unfortunately, the earnings announced for the fourth quarter of fiscal 1999 only met analyst expectations. Even worse, the consensus estimate for revenues had been $5.5 billion, but the actual number came in at $5.17 billion. The Wise, in their typical fashion, sold first and asked questions later. And, as Tom reported a couple of weeks ago, the stock price nose-dived from $108 to about $80. (Recently, the stock has begun to move higher once again.) Before I go any further, I need to point out to any new readers that I am not exactly disinterested when it comes to Dell. I bought my shares in the middle of 1997. In less than two years, those shares are now worth five times what I paid for them (which means that three weeks ago they were worth about six times what I paid). While I can't be completely objective about Dell, I can look at Dell with a longer term perspective than most of the Wisemen of Wall Street. It seems that all the people who sold Dell in the last three weeks, and dropped the price about 30%, either ignored or failed to properly discount the following positive news from Dell's fourth quarter earnings press release (figures in parentheses represent the 4th quarter of 1998): 1. 4th quarter earnings per share (EPS) increased 55% year-over-year. 2. 4th quarter sales grew 38% year-over-year. 3. Both gross and net margins increased. 4. Return on Invested Capital (ROIC), although down, was still a stellar 170% (vs. 217%). 5. Inventory turned over every 6 days (vs. every 7 days). 6. The cash conversion cycle (CCC) was negative 12 days (vs. negative 8 days). 7. Dell gained market share over its key competitors, growing the business at 3.5 times the rate of its competitors. 8. Ford Motor Co. (NYSE: F) announced it was standardizing on Dell computers. 9. Internet sales are now more than $14 million per day, equivalent to a $5 billion annual run rate. 10.International growth was also impressive. For example, growth was profitable in Asia-Pacific and revenue growth in that region was 30%,while unit ship growth was five times the market rate. And on, and on, and on. You may not be familiar with a few of these items, like cash conversion cycle or inventory turns. These are asset activity metrics that companies like Dell and other Merchant Kings use to assess their performance. Compared to the vast majority of Merchant Kings, Dell's fourth quarter was outstanding. However, day trader James Cramer of TheSteet.com said that Dell had a "crummy quarter." It's a tribute to Dell that Cramer's view wasn't completely off base. Tomorrow, I'll continue this story by explaining why. ================================================================= Just a short summary why DELL is always the Next DELL Kwan

To: Mohan Marette who wrote (108407)	3/9/1999 1:54:00 PM
From: hdl	Respond to of 176387

Mohan, I needn't even know or be questioning your strategy so much. Dell is overpriced because of the strategy of others (not you) who buy indexes are closet indexers or use an index as a norm and overweight or underweight some stocks, sectors, etc. all of the above will be owning, buyind dell-because it is so heavily weighted in certain popilar indexes. all longs are affected by this. thus far the affect is positive for longs. from reading some of your posts, i believe you are intelligent enough to understand this. i am surprised or skeptical if you didn't understand my previous post (a couple of posts-because lengthy) to which you replied and to which reply i am replying.