DELL-- watch it closely over the next quarter

If you follow the short term froth of the markets like I do, stop right now before it drives you insane!

You probably saw the huge (14% in one day!) sell-off of this household name's stock last week. Investors are sick and tired of waiting for Michael Dell to execute the turn around of this wayward former superstar despite the fact that:

• it's been less than a full year since Dell re assumed his CEO status
• the company is making lots of money-- maintaining high levels of FCF and minimal debt and lots of cash in the bank ($12 Billion! v.s. 760 M in debt) for planned share buy-backs
• the Q3 results showed that sales and earnings exceeded expectations and there was a considerable improvement of gross margins to just short of analysts' expectations of 19%
• it's at a historical low for P/E (forward = 14)
  

This stock is clearly oversold. Yes, there is an expense issue--- Dell needs to reduce their head count amongst other fat-trimming measures. The business plan is evolving from the prior approach with more brick and mortar sales via kiosks and Staples/Walmart big box stores and more emphasis on customer service. The management is not doing it fast enough to keep the Street happy. We've seen this happen to Dell in the past and when Michael has the pressure on, he consistently shines and comes through for the shareholders. DELL is one of the best performing securities in history.

For those of us who are don't mind buying and forgetting about it for a while, this would be one of the safer bets, IMHO. Personally, I'm hoping that the Street beats it up a bit more and I can pick it up in the New Year in the high teens or low 20's.

You can do the full analysis easily for yourself.

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