8/28/24 - $dell - Spec buy at $110 into print
8/28/24 :: VROCKSTAR :: 
DELL
Spec buy at $110 into print
- about 100 bn dollar company doing 6-7 bn in FCF (that's real FCF) so great yield here for a biz that's a full-suite enterprise tooler
- in light of the
SMCI accusations, while DELL is quite a bit broader of a biz model, they would stand to benefit from a tainted player (I'd *like* to buy SMCI, but am out of the stock, thankfully and don't think in this environment I'd neck out given I agree the CF dynamics are a little hard to understand and this is the core of the accusation).
- back to DELL. so great FCF yield. add the debt to the stock price (so gross it up by 25%) and you go from $110 to about $140. on $9 of EPS power that's ~15x. And the CAGR of these EPS results is about 15%.
- so while it might not be a table pounding buy here, it offers a nice tangential way of playing
NVDA EPS (beta) while protecting a bit on the downside. This is the main reason I own 
TSM (diff beta but similar logic).
LMK what you think. given results tmr, I might play a small 25 bps and keep it on the short list in case we get a dumpity doo dah in the next weeks back toward the 80s (which i'd not "expect" but where you've got great support). I think the stock in the low $100's is already pretty good value. $110 is probably a 7/10 entry. closer to $100 is a 8-9/10 entry and anything toward 90s and 80s again would be a 10/10 entry and probably worth a 2%+ set and forget position.
thoughts?
V
DELLSpec buy at $110 into print
- about 100 bn dollar company doing 6-7 bn in FCF (that's real FCF) so great yield here for a biz that's a full-suite enterprise tooler
- in light of the
SMCI accusations, while DELL is quite a bit broader of a biz model, they would stand to benefit from a tainted player (I'd *like* to buy SMCI, but am out of the stock, thankfully and don't think in this environment I'd neck out given I agree the CF dynamics are a little hard to understand and this is the core of the accusation).- back to DELL. so great FCF yield. add the debt to the stock price (so gross it up by 25%) and you go from $110 to about $140. on $9 of EPS power that's ~15x. And the CAGR of these EPS results is about 15%.
- so while it might not be a table pounding buy here, it offers a nice tangential way of playing
NVDA EPS (beta) while protecting a bit on the downside. This is the main reason I own TSM (diff beta but similar logic).LMK what you think. given results tmr, I might play a small 25 bps and keep it on the short list in case we get a dumpity doo dah in the next weeks back toward the 80s (which i'd not "expect" but where you've got great support). I think the stock in the low $100's is already pretty good value. $110 is probably a 7/10 entry. closer to $100 is a 8-9/10 entry and anything toward 90s and 80s again would be a 10/10 entry and probably worth a 2%+ set and forget position.
thoughts?
V
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