"Dell's Still a Dog"--Barrons

Dell (DELL) deserves an Ingram-Micro stock multiple (9X), a hedge-fund manager argues in Barrons, not an IBM or HP multiple (14X). This revaluation would take the stock from $20 to $15.

The logic?

  • Dell’s consumer business is still losing money,
  • Dell’s financing business is the tech equivalent of a sub-prime mortgage lender
  • Not as strong internationally as HP
  • Changing business model (direct to direct/retail hybrid)
  • Operating expenses soaring despite flat headcount

Fair enough. But unlike IBM and HP, Dell at least has some low-hanging fruit to pick. And if economic weakness finally hits HP and IBM, their multiples will likely drop to Ingram-Micro multiples, too.

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