Time to Buy Dell Technologies Stock

On Feb. 25, 2021, Dell released its fourth-quarter fiscal 2021 results for the quarter ending January 2020. The Company reported earnings-per-share (EPS) of $2.70 excluding non-recurring items versus consensus analyst estimates for a profit of $2.14, a $0.56 per share beat. Revenues climbed 8.7% year-over-year (YoY) to $26.11 billion, beating consensus analyst estimates for $24.5 billion. Full-year revenues high record levels at $94.4 billion, up 2% YoY and EPS of $8.00 was up 9% YoY. The Client Services Group (CSG) revenues hit $48.4 billion, up 5% YoY. The Company shipped out 50.3 million units, up 8% YoY. Commercial PC unit growth was 11% with market share growth in notebooks. Consumer business hit a record $13 billion in revenues, up 12% YoY. The Company expects to pay down at least $5 billion in debt this year. The Company also expects strong mid-teens revenue growth for the year.

Conference Call Takeaways

Dell COO Jeff Clarke provided examples of its highly distributed vision:

He noted:

He concluded:

The Company expects 5G connectivity, “will drive $700 billion in cumulative spend on edge IT infrastructure and data centers within the decade.”

On Apr.14, 2021, Dell Technologies announce it will spin off its 81% stake in VMware resulting in two standalone companies. Dell will distribute a special cash dividend of $11.5 to $12 billion to VMware shareholders, Dell will receive $9.3 to $9.7 billion to pay down debt, which stands at $48.5 core balance, which should position the Company for investment grade ratings. The transaction is expected to be completed by Q4 fiscal 2021.

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for DELL stock. The weekly rifle chart has been in a powerful uptrending with a rising 5-period moving average (MA) support at $99.22 pointing at upper Bollinger Bands (BBs) at $110.58. The weekly stochastic is poised to form a high band mini pup or a peak and cross down. The current trend peaked at the $103.62 Fibonacci (fib) level. The daily rifle chart for a market structure low (MSL) on the breakout through $98.72 after recovered from the daily market structure high (MSH) sell trigger on the $101.15 breakdown. The daily rifle chart is a make or break as the 5-period MA attempts to slope back up at $98.71 and the daily stochastic attempts to cross back up through the 50-band. However, the daily stochastic could form a bearish mini inverse pup if shares fall back below the daily 5-period MA. This can provide prudent investors with opportunistic pullback levels at the $99.02, $95.82 fib, $93.52 fib, $91.07 fib, $87.68 fib, and the $85.69 fib. Upside trajectories range from the $108.95 fib up to the $127.10 fib.

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