In the wake of disappointing earnings news at Apple, another computer hardware firm is becoming attractive from a value-perspective: Dell (DELL
). While DELL’s share price has taken a beating in the last 12 months – down almost 26% – an in-depth analysis shows that perhaps DELL was kicked around more than it deserved. And for a value investor, there is often no better time to make a move on a stock than when no one else wants it.
No doubt DELL faces significant pressure in its PC business from competitors as well as consumers expecting a lower purchase price. DELL appears to be aware of this issue and has addressed it. As a result, DELL is making a sound effort to push further into the services area such as servers and cloud computing. Currently, services and storage represent only about 17% of total revenue, a figure that should grow rapidly with DELL’s commitment to this segment. Furthermore, while true DELL largely missed on the tablet-craze, it could expect at least a small lift to product growth should they decide to enter this segment (especially if the product runs the new Windows operating system). Continue Reading »