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PCs Are Dead, Death Knell for Dell

Investor interest: Here is where I think Wall Street has it all wrong. The overly educated CFAs have made 11 strong buy, five buy, 15 hold, two underperform and no sell recommendations to their clients. I'm not sure I interpret their own revenue and earnings projections the same way they do.

I use Motley Fool readers' opinions to gauge the individual investors' sentiment and even its 5,775 readers have given a weak 71% vote of confidence that the stock will beat the market.

Competition: I always like to see how the market views a stock compared to its competition. Over the past year, while Apple (AAPL - Get Report) was up 60% and IBM (IBM - Get Report) was up 13%, Dell was down 41% and Hewlett-Packard (HPQ - Get Report) was down by 45%.

Apple has an A++ financial strength rating and an A rating by TheStreet. Revenue is projected to increase by 23.90% next year and earnings are expected to compound annually at a 24.02% rate for the next five years.

IBM has an A++ financial strength rating and an A+ rating by TheStreet. Revenue is projected to increase by 2.70% next year and earnings are expected to compound annually at a rate of 9.97% over the next five years.

Hewlett-Packard has an A financial strength rating and only a D+ rating by TheStreet. Revenue is expected to decrease by 4.70% next year and earnings are estimated to compound by only 1.75% annually for the next five years.

Yahoo! Finance Profile: Dell provides integrated technology solutions in the information technology industry worldwide. It designs, develops, manufactures, markets, sells and supports mobility and desktop products, including notebooks, workstations, tablets, smart phones and desktop PCs, as well as servers and networking products.

The company sells its products and services directly through its sales representatives, telephone-based sales, and online sales; and through retailers, third-party solution providers, system integrators, and third-party resellers. It serves corporate businesses, law enforcement agencies, small and medium businesses, consumers, and public institutions that include government, education and health care organizations. Dell was founded in 1984 and is headquartered in Round Rock, Texas.

Conclusion: For my investment accounts I want projected steady increase of revenue and earnings and I do not see that from Dell. Only speculators and day traders need to follow this stock and they will be praying for a better P/E.

Your IRA deserves better and if you need to be in this sector, I think you'll agree that the market likes Apple and IBM better than Dell and Hewlett-Packard and so should you.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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DELL $0.00 0.00%
AAPL $93.74 0.00%
IBM $145.94 0.00%
HPQ $12.27 0.00%
FB $117.58 0.00%


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