Dell back in business
Last month I wrote that Dell was a buying opportunity. Less than two months later, it appears I was correct. After much problems, Dell finally reported and beat the street by 6 cents per share. The stock shot up almost 9% in after-hours action on that day. In my view, DELL is not yet done. This stock has the potential to move towards $30/share. With the implending released of MSFT Vista, 2007 looks bright as corporations would be looking to upgrade.
If you were lucky enough to have bought at the lows, my congratulation. Those of you that do not own DELL, I would wait for the next oppoturnity as those that have bought it when it was $22 and those that are dying to get rid of this stock will be looking to unload their position. Exercise patience, chasing a hot stock has never turned out well. In our view, a good entry price for DELL is $24 - $24.50 range. However, given the bullish nature of the market, chances are we'll never see DELL at $24 for awhile. Trading in the $26 range, the upside potential still outweighs the downside given Microsoft has now shipped Vista. Our expectation is DELL will do well in 2007 and the stock will be in the mid 30s.
Comments
Interesting post on Dell. I am slightly less optimistic than you about the corporate desire to upgrade to Vista upon its release though. In my opinion it is not something to base a buy on.
Posted by: PL | December 12, 2006 11:22 AM