Is Dell a Buy Despite Potential for Going Private?

E = Equity to Debt Ratio Is Normal             

The debt-to-equity ratio for Dell is normal. The balance sheet is in positive territory. Operating cash flow is $3.86 billion.

Debt-To-Equity

Cash

Long-Term Debt

DELL

0.89

$11.27 Billion

$9.04 Billion

HPQ

1.25

$11.30 Billion

$28.44 Billion

 

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T = Technicals on the Stock Chart Are Mixed      

Dell has performed poorly over a one-year time frame, but year-to-date has been exceptional. Dell has outperformed Hewlett-Packard Company (NYSE:HPQ) and the S&P 500 year-to-date. Dell currently yields 2.30 percent. Hewlett-Packard yields 3.10 percent.

1 Month

Year-To-Date

1 Year

3 Year

DELL

8.26%

37.08%

-22.23%

4.85%

HPQ

0.18%

20.28%

-40.43%

-64.52%

S&P 500

2.48%

6.86%

14.19%

46.34%

 

At $13.81, Dell is currently trading above all its averages.     

50-Day SMA

11.93

100-Day SMA

10.76

200-Day SMA

11.56

 

E = Earnings Have Been Inconsistent               

Dell has a habit of delivering profits, which is great, but EPS growth has been inconsistent through the years. Revenue had been improving on an annual basis until recently.

2009

2010

2011

2012

2013

Revenue ($)in billions

61.10

52.90

61.49

62.07

56.90

Diluted EPS ($)

1.25

0.73

1.35

1.88

1.35

 

When we look at the last quarter on a year-over-year basis, we see a decline in earnings and revenue.

1/2012

4/2011

7/2012

10/2012

1/2013

Revenue ($)in billions

16.03

14.42

14.48

13.72

14.30

Diluted EPS ($)

0.42

0.36

0.42

0.27

0.30

 

Let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

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