Dell Is Hard to Resist

 | Jan 14, 2013 | 2:55 PM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

dell

Dell (DELL) is hard to resist.

Here's why: Business could be turning. I don't think people realize how far along Dell is toward not just being a personal computer company. Dell's a service company. It has a personal computer division, for certain, but it is losing share to Hewlett-Packard (HPQ) and Lenovo.

It has spent a fortune turning itself into a one-stop provider for companies in the U.S. and Europe, and it's a big government contractor pretty much around the world.

And we have a very motivated guy. Michael Dell is tired of being a whipping boy. He has a real good business that is in a cyclical trough and another business that is in a secular decline, but has mastered both and can handle the latter while improving the former. Lots of cash, lots of cash flow. I think it can work.

I keep thinking about that moment when Goldman Sachs went from Sell to Buy in one day, pointing out that a transaction could be upon us. If we get one, it isn't going to happen this low. It will happen much higher.

In the interim, I don't think there is as much earning risk as people think -- at least in the second half, when I believe the huge spend on enterprise services will indeed pay off.

Columnist Conversations

Using this year's estimate to make a P/E is pretty standard. Basing a multiple on 2015's projected EPS is not ...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.