DELL Preview: Expecting a Miss

With that as the backdrop, I think anyone with a pulse is expecting poor numbers from Dell. Street consensus estimates have been declining since Dell laid its egg in the last quarter. Since that point, EPS estimates have dropped more than 20%, but, surprisingly, revenue consensus is down only 2%. That does not compute.

Given the current market conditions (as well as anecdotal comments from the company on market conditions), it would seem unlikely that Dell will hit the revenue benchmark. Higher levels of spending are also likely to magnify their impact on the bottom line, so I'll be surprised if they reach the 32 cents per share the Street is expecting for earnings.

Despite the macro-level gloom and doom, similar to many companies, Dell is selling at a fire-sale-like price. The company's enterprise value-to-revenue is an amazing 0.21-times with $3.78 per share in net cash. That's tantamount to a going-out-of-business sale and that's obviously not happening.

Dell is one of the many technology and telecom companies that Bob Faulkner discusses weekly in The Telecom Connection.

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Know What You Own: Dell operates in the personal computer industry, and some of the other stocks in its field include Apple (AAPL - commentary - Cramer's Take) and Palm (PALM - commentary - Cramer's Take). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

Click here for the summary.

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At the time of publication, Faulkner had no positions in the stocks mentioned, but The Telecom Connection model portfolio was long Dell calls.

Bob Faulkner has been in the investment business for 18 years with an exclusive focus on technology stocks. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Faulkner appreciates your feedback; click here to send him an email.

Interested in more writings by Bob Faulkner? Check out his newsletter, TheStreet.com The Telecom Connection. For more information, click here.