Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, computer giant Dell (Nasdaq: DELL ) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Dell's business and see what CAPS investors are saying about the stock right now.
Dell facts
| Headquarters (Founded) |
Round Rock, Texas (1984) |
| Market Cap |
$27.2 billion |
| Industry |
Computer hardware |
| Trailing-12-Month Revenue |
$61.7 billion |
| Management |
Founder/Chairman/CEO Michael Dell
CFO Brian Gladden |
| Return on Equity (Average, Past 3 Years) |
37.8% |
| Cash/Debt |
$13.8 billion / $8.26 billion |
| Competitors |
Apple (Nasdaq: AAPL )
Hewlett-Packard (NYSE: HPQ )
IBM (NYSE: IBM ) |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 29% of the 5,705 members who have rated Dell believe the stock will underperform the S&P 500 going forward. These bears include thecashmen and cadunce.
Just last week, thecashmen tapped Dell as an outdated opportunity:
[PCs] are so cheap now and getting cheaper. I really don't see any growth. This is a company stuck in the early to mid 2000s with a bad hair cut and a leather jacket on. Dude, what's new[?] [N]ot much.
Over the next five years, in fact, Dell is expected to grow its bottom line at a paltry rate of 5% annually. That's slower than that of competitors like Apple (19%), IBM (11%), and even HP (8%).
CAPS member cadunce elaborates on the bear case:
[J]ust strictly a second-rate company. Second rate computers (now that they're quality has gone down the tubes in recent years), second rate printers, second rate phones and tablets (if that). No innovation. Their only ability to make money is to copy the more innovative companies, produce cheaper, lower-quality goods, and then hope that people ... buy them. No thanks. I'll short this one.
What do you think about Dell, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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