Great Call on Dell! What's Next?

Trying to keep pace with a slew of competitors in the electronics and computing world, Dell (Nasdaq: DELL  ) has been making headlines with its introduction of a stylish and super-thin laptop and an attempt at introducing its own smartphone. This may be a departure from the company's unimaginative, one-size-fits-all image, but it's debatable whether it's a move for the better.

Not only have some efforts fallen flat -- one publication dubbed the phone attempt "Dullephone" -- but it's questionable whether introducing higher-priced items during a once-in-a-lifetime recession is the most advisable timing.

More than 5,500 members of The Motley Fool's CAPS service have weighed in on Dell's stock, and the resulting two-star rating suggests that many are skeptical that it will show much pep. CAPS member and current score leader on Dell, rangercapt, has managed to rack up a pile of points with two correct calls on Dell, but the fact that the most recent call was closed out midway through last year suggests that rangercapt could be better classified as a former Dell bull.

rangercapt is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and has managed a stock-picking accuracy of 64% while racking up close to 400 points. Dell isn't this player's only great call. Here's a look at a few of the other prescient picks:

Company	Date Picked	Call	Points	CAPS Rating (5 stars max)
Overstock.com (Nasdaq: OSTK  )	12/21/06	Outperform	119	*
Genentech (NYSE: DNA  )	4/19/07	Outperform	65	****
Silver Wheaton (NYSE: SLW  )	2/27/07	Outperform	46	*****

Data from CAPS.

So, what is this investor looking at these days? Here are a few of the most recent CAPS calls:

Company	Date Picked	Call	CAPS Rating
Microsoft (Nasdaq: MSFT  )	3/3/09	Outperform	***
Cemex (NYSE: CX  )	3/3/09	Outperform	*****
Starbucks (Nasdaq: SBUX  )	3/3/09	Outperform	**

Data from CAPS.

You shouldn't make investing decisions based on another person's opinion, of course, but this group offers some good places to start your own further research. I decided to take a closer look at Motley Fool Stock Advisor recommendation Cemex.

Cemex's cement shoes
Apparently CAPS members and Mr. Market do not agree on Cemex. While the stock has been a consistent five-star CAPS pick for the past two years, it's gotten crushed to the tune of negative 82% -- far more than the S&P 500 index.

So, what gives? Has the market missed something? Or are CAPS' members off base on this cement giant? pencils2, one of CAPS' top players, gave Cemex stock a thumbs-up way back in May 2006, noting:

Cement is an industry that will be booming in India, Russia, South America, and China (Along with other areas), and Cemex has operations in all of those places. A 100-year-old company with increasing income, high EPS, low P/E compared to the industry average, and the price has recently taken a hit. I see a great opportunity here for the long run as long as cement stays in high demand.

I don't think I'm going out on much of a limb to say that we live in a much different world today than when pencils2 wrote that pitch. What it's meant for Cemex is that demand from emerging markets has dried up significantly as global trends have hurt countries like India, while plummeting oil prices have affected others, like Russia.

Cemex hasn't been blameless in its downfall. The boom times encouraged the company to pursue some major acquisitions, most notably the takeover of Australia's Rinker. The binge made Cemex one of the premier cement companies in the world, but it also loaded it down with a huge amount of debt -- $4 billion of which needs to be dealt with this year.

I find myself a good deal less bullish on Cemex than the rest of the CAPS community, which is a shame because the company's core business is a good one. Those looking for a risky bet may be interested in jumping on Cemex now on the expectation that it will be able to work out its debt situation favorably. For everyone else, a wait-and-see approach may be the safer way to go.

But what's your take on Cemex? Will it work through its debt problems and let its core business shine? Get in the action by clicking over to CAPS. It's absolutely free to join our Motley band of more than 130,000 stock pickers.