Investopedia: Dell Deep In Value, But Does Anyone Care?

I have often written that value really does not matter in technology investing. This is a sector driven by growth, not valuation, and it is all too rare for cash flow-based analysis to carry the day. That makes Dell (Nasdaq:DELL) a very difficult stock to evaluate. If the company can deliver anything close to its projected free cash flow, the stock is shockingly cheap. But with revenue growth so low - and likely to remain sluggish - it may be hard to attract any investors who care.



A Complicated Second Quarter
Dell is trying to transition from being largely a consumer-driven PC company into a fully-integrated enterprise IT provider. So far, the results continue to be mixed. Revenue grew just 1% over last year's level, but 4% from the first quarter - a result that nevertheless missed analyst expectations.

Enterprise demand was respectable and helped offset ongoing difficulties in the PC and notebook business, where Dell continues to struggle to maintain momentum against rival PC-makers like Hewlett-Packard (NYSE:HPQ) and Acer and PC alternatives like Apple's (Nasdaq:AAPL) iPad. Server and networking revenue was pretty strong (up 9% year on year and 4% sequentially), software revenue was flat and service revenue was also positive. Storage was the laggard on a reported basis, as the company transitions away from EMC (NYSE:EMC), but Dell-owned storage technology revenue was up 15%.


To read more, click the link:
http://stocks.investopedia.com/stock-analysis/2011/Dell-Deep-In-Value-But-Does-Anyone-Care-DELL-HPQ-IBM-CSCO-EMC-AAPL-NTAP0817.aspx