Opinions Steve MacMillan
Dell ComputersDELLBUYJan 03, 2007
Valuation is attractive. Not as risky as some other high-tech stocks.
Steve MacMillanOwned
$25.49
Stock price when the opinion was issued
$394.39
As of Jun 05, 2026. Market Open.
electricalelectronic
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A conservative play, given that we don't know if we're going to have a recession in Q3 or Q4. Haircut and slowing growth, but 60-65% of its business is in data centres. So it's a play on generative AI, which needs data. One of the biggest suppliers of racks in data centres. Price target of $55. Yield is 3.14%.
(Analysts’ price target is $52.35)
Kim BoltonOwned
electricalelectronic
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Stockchase Research Editor: Michael O’Reilly Yes, computer system sales are down from previous year across the industry, but that was following sizeable pandemic led demand growth as remote working accelerated. DELL trades at only 5x book and has been prudently using some cash reserves to retire debt and buy back shares. It’s dividend is backed by a payout ratio under 25% of cash flow. We recommend placing a stop-loss at $27, looking to achieve $55 — upside potential over 59%. Yield 3.8% (Analysts’ price target is $55.21)
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BUY
He's confident that PCs will continue to sell post-Covid, though sales will indeed slow down. Since Jan. 2019, shares have jumped 150% while the S&P was up 65%. Covid fuelled PC sales. 2021 fiscal saw record sales and could beat that this year. Since reopening last year, companies have been ramping up servers and storage, which Dell offers through its infrastructure division. Meanwhile, Dell spun off its VMware subsidiary that fetched $9 billion and sold their cloud business to private firms for $4 billion. All this has helped pay down a lot of debt, which was huge and deterred many investors. Love-November Fiscal 2021 saw record revenues at 21% growth and earnings growth at 17%. Client solutions and PCs were up 35% YOY. Managers offered super guidance. Their PC sales will be durable.
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BUY
Last week, Dell delivered a slam-dunk quarterly report. True, their enterprise business is slower than he'd like, their sales were up plus they delivered a massive earnings beat. Also, they paid down a ton of debt. The home office market is booming during Covid. And yet, Dell stock barely moved.
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Once a big player in desktop PC's, Dell fell off the radar of investors in October 2013 when it went private, then quietly returned to Wall Street in July 2018. In mid-July, Morgan Stanley upgraded Dell from $50 to $68 price, from equal- to overweight, after Dell announced it was exploring options concerning its US$50-billion, 81% holding of VMware, which gives Dell a stake in the cloud computing industry. The Morgan Stanley analyst praised Dell's market share gains, de-levering efforts, simplified ownership structure and recent peer multiple expansion. Dell plans to spin-off its stake in VMware, though not until September 2021. Dell could monetize that investment and give the spun-off entity room to grow faster. Currently trading at a reasonable 10.3x PE, Dell shares have doubled since the March 23 bottom to touch $60/share, which was its price target. Of the last four quarters, Dell beat the street three times, and barely missing its Q1 by two pennies. The stock has three strong buys, five buys and nine holds. Typical for a tech stock, Dell pays no dividend.
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COMMENT
AI advacements? He likes DELL products. The stock does not have the greatest balance sheet however. He likes AI, but there are other device manufacturers that are better situated like NVDA, who is also well placed for gaming.
Shane ObataUnknown
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