Forgive me for my yawn over Dell's (NASDAQ:DELL) net margins. While 6.4% is good for its industry, it's nothing to write home about. In fact, margins in that range are about what I'd expect for successful commodity companies, not market-leading branded-goods firms. In fact, oil giants ExxonMobil (NYSE:XOM) and ChevronTexaco (NYSE:CVX) actually posted stronger recent net margins of 10.9% and 7.6%, respectively, and their products are virtually indistinguishable from each others'. I'll grant that Dell is the best in a bad industry, but even the best isn't immune from the realities of an ugly market. As I mentioned in my opener, the real value-generators in the PC business are the companies that control the brains and the look and feel of the systems, not the box makers.

Commodity pricing is always a race to the bottom -- one where even the winners do not escape unscathed. Dell doesn't have the pricing power to see its margins rise to that of commodity firms, much less branded-food companies like Pepsi (NYSE:PEP) and Coca-Cola (NYSE:KO) and their respective 12.5% and 21.1% net margins. Face the facts: Food is usually considered a low-margin business, though not apparently compared with computer assembly.

Dell's shares have dramatically underperformed S&P 500 index trackers like the SPDRs (AMEX:SPY) over the past year, though Dell's shares still trade at a premium to that index's trailing earnings. With such tight margins combined with its rich valuation compared with the market, any operating stumble could send its shares down even further.

Tight margins, premium valuations compared with the market, and a lousy position in the computing value chain make Dell a risky company to own right now. I'll wait for a panic sale before thinking about investing my cash.

Dell and Coca-Cola have both been recommended in Motley Fool Inside Value . Dell is also a Stock Advisor pick.

Think you're done with the Duel? You're not! Go back and read the other three arguments, and then vote for a winner.

At the time of publication, Fool contributor Chuck Saletta had no ownership stake in any of the companies mentioned in this article. The Motley Fool has a disclosure policy.