Dinging Dell, Redeux:
Yesterday, it was longtime bear Bill Fleckenstein with the reason he believes
is likely to either guide analysts down in expectations of 21 cents per share for the second quarter that ends June 30 -- or simply miss it altogether. That prompted the equally not-shy Michael Murphy, best known for his
California Technology Stock Letter
, to pass along what he believes to be just the opposite. (This is what he told subscribers to his
newsletter, which is diff from the California sheet, when he gave Dell an aggressive recommendation.) If anything, says the Murph, when Dell reports on May 11 for the first quarter, it won't just beat estimates by at least a penny, but will also beat second-quarter estimates -- which Fleck thinks the company will miss by as much as 2 cents.
His reasons: The March quarter grew 15% "even without Win2000. Corporations bought almost nothing before the Win2000 intro because they hate to do OS upgrades." Then there's Europe, "which is exploding right now as sub-$600 PCs catch on for Internet access."
This quarter, he says, the mix shifts to "Win2000 high-end servers, which helps beat the quarter." And "Dell passes
to become the No. 1 PC supplier this year, perhaps as early as the July Q." Meanwhile, he says, the Street's future growth expectations have been "cranked down to 33% from 50% and that's already in the stock
that sells for a P/E less than two times its growth rate -- not bad for the No. 1 player in a tech industry."
Even if its growth has slowed and it still trades at 81 times last year's earnings? Nothing like two smart guys disagreeing.
Inside the real Wall Street:
"I had to laugh when I read your 'musings' this a.m., re: the Merrill analyst's 'timely' downgrade of
," writes a former longtime
employee who requests anonymity because of his role there. He's referring to the analyst who downgraded the stock only
it fell to 6 from 50. "I had a ringside seat to witness much of Conseco's bullying of the Street in their heyday. In the 1990s, Conseco generated about $15 million per year in commissions just in fixed income to Merrill. I remember once when the Merrill analyst downgraded them: They blasted the poor salesman who covered the account and cut us off from all business for quite a while.
"While the analyst stuck to his guns, you had to know that the experience was in the back of his mind every time he considered making a move on Conseco. I'm sure you know this type of thing happens every day on Wall Street, but I can tell you that Conseco was amongst the worst of the 'bullies' in terms of using their investment activity to influence the activities of the Street."
So far! The more stories like this, the more level the playing field.
Typical of my email in the wake of an item
here earlier this week on
was this, from Joanna Burks, who writes: "This story is junk and you know it! Heard of bad karma? Study up on it. This is not your first karma violation. Shame."
In other words, folks, the Hostile React-O-Meter is spinning outta control, I tell ya,
spinning outta control
... And from someone named Farhad comes this, regarding my reporting on Fleckenstein's comments on Dell: "I will make this short as I know it will end up in your trash bin! All I ask is that if you and Fleck turn out to be wrong on May 11, admit it in your column on May 12. The bulls on Dell will certainly admit it if they were wrong (By selling!!). But will you?? My guess is that in this era of 'paid financial journalists' it will never happen."
To which I wrote: "Go back and read my semiannual report cards (and all of the interim concessions) before you make
kind of accusation." Finally, after
penned his column yesterday
defending my talking to sources like Bill Fleckenstein -- for which I usually take an inordinate amount of grief -- reader Bill Smith wrote: "Keep up the good work ... anyone with any brains understands what you are doing." "Which," I shot back, "explains a lot!"
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
firstname.lastname@example.org. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.