Investopedia: A Real Dell Dilemma

Once in a while value investors face a real puzzle - what to do with a company that looks really, really cheap but lacks most of the hallmarks of long-term winners. Looking over Dell's (Nasdaq:DELL) fiscal fourth quarter results, it seems apparent that there is growth and some value here, but it is also clear that the company has a very long way to go in realizing its goals of becoming a more diversified tech company that can really compete with the likes of Hewlett-Packard (NYSE:HPQ) and IBM (NYSE:IBM). 

A Mixed Bag of Fourth Quarter Results
Dell's fourth quarter results are another interesting study in the differences between absolute performance and performance relative to expectations. While the market is quite pleased with Dell's results, it is less certain that long-term investors should be so enthusiastic.

Sales rose 5% for the fourth quarter and rose 2% on a sequential basis. That's not especially compelling when investors consider that the giant IBM is growing faster, and it was just a bit below the consensus expectation. Within that total, servers grew quite nicely (up 16%), while software and peripherals did fine (up 7%), and computers did okay (up 4% for both desktop and notebooks). Services revenue grew only 1%, though, and storage revenue actually shrank 4%.

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