Dell (DELL) missed by one penny, relax

Dell Inc. (NASDAQ:DELL) missed revenue by 1 cent, they posted earnings of 34 cents per share on revenue of $15.64 billion, missing the Street's estimates for 35 cents per share on revenue of $15.34 billion. Big deal.  The selloff today is due to Dell's warning that market changes could hurt its future profits, but a 13% to 15% drop?  Come on, this is Dell we are talking about.

Dell's shares fell the hardest in 7 years, just take a look at the 5 day period:

Dell is the world's second-largest personal-computer maker and they are doing everything right.  Their revenue rose overall, U.S. consumer sales shrank 6 percent after the company lost orders to market leader Hewlett-Packard Co. But Dell also said it wouldn't sacrifice investments in growth to meet an operating expense target, they are standing their ground.

Anders Bylund at Fool.com said it best today:
Overall, Dell just wants to grow faster than the competition in the most promising markets, and maximize long-term cash flow even at the cost of short-term cash pain.

Sounds good to me. Any company that works toward long-term goals even when it hurts in the short term is on my watch list. If those long-range strategies also happen to make sense, as Dell's do, the jump from watch list to real-world portfolio starts to look doable. And when Wall Street punishes the stock for the short-term concerns rather than rewarding it for a good-looking bigger picture, well, the deed is as good as done.

Dell shares are going to recover and I wouldn't be surprised to see buyers next week drive the stock up 2 to 3%.  The fact that Dell missed earnings is nonsense, the analysts that came up the numbers that happened to be a penny shy need to go back to playing Tetris all day.  They missed by one penny folks and of course growth is going to slow down the rest of the year and into 2008, the economy is freaking out.

Fellow Masters, I'm pulling a Jim Cramer and backing up the truck on Dell at $24 a share.  Panic selling is just a bonus for the guys that waited after the call to make a play on Dell, now that play is clear -- buy.

Article written by Ted Gottsegen 

Contributor at TheStockMasters.com

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