Erstwhile computer king Dell
What analysts say:
- Buy, sell, or waffle? Twenty-eight analysts follow Dell, giving the stock 18 buy ratings and 10 holds.
- Revenue. On average, they expect to see quarterly sales rise 13% to $16.27 billion.
- Earnings. Profits are predicted to rise 20% to $0.36 per share.
What management says:
Investors read Dell's latest acquisition news to the smooth sounds of Sly and the Family Stone:
It's a family affair, it's a family affair ...
One child grows up to be
Somebody that just loves to learn
And another child grows up to be
Somebody you'd just love to burn
Earlier this month, in an effort to break into the Software-as-a-Service (SaaS) field that salesforce.com
Suspicious? Only partly. The Family Dell went out of its way to do this deal on the up and up. Among other efforts, Michael Dell recused himself "from all aspects of the decision-making process," and Michael, Susan, and the minor children are all going to donate their shares of the profit to charity. On the other hand, Adam and the 'rents can still make out like bandits on this $155 million deal.
What management does:
A company's entry into a new market often suggests a hunt for higher margins. But as you can see below, Dell's actually been doing a decent job of improving hardware-based margins all on its own. And I can't help but notice that Dell's own hardware profit margins aren't just better than Sony's
|
8/06 |
11/06 |
2/07 |
5/07 |
8/07 |
11/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
16.8% |
16.8% |
16.6% |
17.0% |
18.3% |
18.7% |
|
Operating |
6.4% |
6.2% |
5.3% |
5.3% |
5.8% |
6.0% |
|
Net |
5.1% |
5.0% |
4.5% |
4.4% |
4.8% |
5.0% |
Two Fools say:
Two separate Fool newsletters maintain Dell as an active recommendation. At Motley Fool Inside Value, our analysts commented in December that they like Dell's decision to begin selling notebooks and PCs through Best Buy
