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.
