) is set to report fourth-quarter 2013 results today, Feb 19.
Last quarter, the company did not come up with any positive
surprise, affected by the downturn in tech spending and PC
business. Let's see how things are shaping prior to this
Growth Factors This Past Quarter
Amid all the macro uncertainty and the PC market slowdown,
Dell opted for a leveraged buyout (LBO). Once the deal is
finalized Dell would be transformed from a public company to a
The LBO agreement was inked between Dell,
) and Silver Lake Partners (a private equity firm). The purchase
price of $23.0 billion will be funded with debt. Founder Michael
Dell will give up his 15.7% stake and fork out an additional
$700.0 million in cash, $2.0 billion will come from Microsoft and
$1.0 billion from Silver Lake. The purchase price comes to $13.50
to $13.75 a share. Currently, Dell is trading at $13.27.
The privatization is expected to help the company stay away
from public scrutiny so that it can focus more on business growth
and profitability. However, the problem related to Dell's PC
business remains. Further, Dell's position in the server, storage
and cloud computing segments is rather weak when compared with
technology stalwarts like
Considering the situation, it is hard to predict Dell's
success story, unless the company opts for diversification.
The Zacks Consensus Estimate for the fourth quarter stands at
39 cents, while that for fiscal 2013 stands at $1.71.
Dell has beaten estimates in three of the last four quarters,
with a trailing four-quarter average positive surprise of
Estimate revisions have been minimal, with only one downward
estimate revision in the past 60 days. As a result, the Zacks
Consensus Estimate has remained unchanged for the fourth quarter
as well as for fiscal 2013, over the last 60 days. Over the last
90 days, however, the Zacks Consensus Estimate has gone down 1
cent for the fourth quarter of 2013 and up by 1 cent for fiscal
Dell shares carry a Zacks Rank #4 (Sell). The sell rated
stocks (#4 and #5) should never be considered going into an
Other Stocks To Consider
Here are a few buy-rated stocks (Zacks Ranks #1 and #2) that
may be worth considering at this point:
) with a Zacks Rank #1 (Strong Buy).
) with a Zacks Rank #2 (Buy).
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