Despite PC Carnage, Dell Stays Above It All -- but for How Long?

Try telling Dell (DELL Quote) it isn't a high-growth stock anymore. It's still trading like one, largely on the conviction that the company is well on its way to winning the current PC price war. But at these levels, it might be wise to exercise caution before signing off on the bullish story.

Improbably enough, despite both a vicious bear market for tech and a heavy slump in demand for personal computers, Dell continues to levitate. Yes, it's trading at about half of where it was a year ago. But check out its 2001 performance: a 50% gain, amid a 20% decline in the sickly Nasdaq Composite. And the trend may still have legs: Wednesday, with the Nasdaq plunging another 6%, Dell fell just fractionally, buoyed by the latest in a long string of bullish analyst notes on the company, this time from Merrill Lynch's Steve Fortuna.

Fortuna gave warning-weary investors what they wanted: He speculated that when Dell reports its fiscal first-quarter results in May it won't only make its target of 10% sales growth, but it could actually best that figure. In a time when competitors are struggling to get any growth out of their PC businesses, that's nothing to sneeze at. Fortuna also wrote that Dell's earnings per share have a "strong chance" of meeting the 17 cents a share consensus estimate as measured by Thomson Financial/First Call. (Merrill has done no recent underwriting for Dell.) ...