Equity Clock

Dell Inc. (NASDAQ:DELL) – Clock That Stock

Clock_That_Stock

The Stock

Dell Inc. (NASDAQ:DELL) is expected to report earnings following the market close. Consensus is an EPS of 0.27 versus 0.29 in the year ago period. Dell is currently up almost 2% by mid-day. With analysts betting the bank that technology stocks will be among the best performers in 2010, does this stock fall into that classification?

This stock has a track record of beating expectations most of the time, but the record certainly isn’t perfect. Financial ratios are indicating that a premium is required to be paid in order to partake in the earnings, book value and cash flow of this investment. These indicators are worse than the industry in which it operates so you won’t be finding value there in this dominant industry player. Where you will find value is the expected growth prospects. With a current average P/E of around 19 and a forward P/E of 11.5, appreciation in the value of the stock could be witnessed if current levels hold true. My focus on tonight’s release will be of future guidance to determine the impacts, if any, other key players will have on this market segment, affecting their bottom line. Who knows, maybe Apple really will kill the PC.

This company has also shown a history of 50/50 gains following release, averaging a loss of around 2.7% the day following dissemination. Expected short term trading range is 13.19 to 14.87.

The Clock

The seasonality profile of this equity reveals that of a buy-and-hold investment, however if you look at the buy-and-hold return over the past 10 years you will see that it certainly is not. This company has very specific periods of seasonal strength that often come following the downward drive following the earnings release of February each year.

Dell Inc. (DELL) 14.11

-0.03 (-0.21%)

Seasonality Analysis

Analysis has revealed that with a buy date of February 22 and a sell date of July 19, investors have benefited from a total return of 298.47% over the last 10 years. This scenario has shown positive results in 9 of those periods.

Conversely, the best return over the maximum number of positive periods reveals a buy date of March 15 and a sell date of April 5, producing a total return over the same 10-year range of 45.73% with positive results in 10 of those periods.

The buy and hold return for the past 10 years was -71.84%.

Technical Analysis

Support 2

Support 1

Pivot Point

Resistance1

Resistance2

The Numbers

13.86

13.99

14.17

14.30

14.48

Most Recent Close:

14.11

Support/Resistance Analys

Neutral

52-Week High:

17.26

MACD Analysis:

Negative/Increasing

52-Week Low:

7.84

MACD vs. Signal:

Above/Widening

Fib. Retracement:

~ 61.8%

RSI Analysis:

Above 50

50-Day MA:

13.95

Stochastic (Fast) Analysis:

Overbought and Declini

200-Day MA:

13.98

50 vs 200-Day MA Analysis:

50-day Below 200-Day MA

High Critical Level:

14.87

Year over Year Trend:

Strongly Gaining

Low Critical Value:

13.19

Critical Level Analysis:

Within Critical Levels

Average Monthly Gain:

5.2%

MFI Analysis

Above 50 Advancing

Technical Rating:

Candlestick Analysis

Neutral/Indecision

On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels.

Situational Analysis

Past Year

Advancing Sessions %

Return %

10-Year Average

Advancing Sessions %

Return %

Feb 17 thru Mar 19

13.1

Feb 17 thru Mar 19

47.3

5.8

Best Return: 13.1% – Sell Mar 19

Best Return: 9.5% – Sell Mar 4

Feb 17 thru May 18

55.6

27.3

Feb 17 thru May 18

49.1

7.6

Best Return: 38.3% – Sell May 4

Best Return: 17.3% – Sell Apr 17

Feb 17 thru Aug 16

55.2

59.9

Feb 17 thru Aug 16

9.5

Best Return: 60.9% – Sell Aug 13

Best Return: 23.8% – Sell Jun 1

Four Year Presidential Cycle: Through Mid-Term Election Years

Following Earnings Releases

5-Period Average

Advancing Sessions %

Return %

16-Period Average

Advancing Sessions %

Return %

Feb 17 thru Mar 19

44.7

16.5

30-Days Following

48.8

-0.5

Best Return: 21.3% – Sell Mar 3

Best Return: 5.5% – Sell 17 days following

Feb 17 thru May 18

37.5

28.6

60-Days Following

48.9

-1.6

Best Return: 40% – Sell Apr 12

Best Return: 7.6% – Sell 33 days following

Feb 17 thru Aug 16

39.3

46.9

90-Days Following

50.2

-1.2

Best Return: 64% – Sell Jun 2

Best Return: 11% – Sell 53 days following

Further Analysis

Sector:

Technology

Industry:

Personal Computers

According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Technology Sector ranges from October 9th through to January 17th. The seasonality ends around the time of the Consumer Electronics Show at the beginning of January and before earnings are finished being reported for the previous quarter in which holiday sales contributes significantly to the bottom line.

Current Consensus Recommend:

Outperform

Recommendation 1-Month Ago:

Outperform

Recommendation 3-Months Ago:

Outperform

Disclaimer

Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.