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Stocks To Love
MF Selena's Stock to love
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You've surely heard the old saw about not falling in love with a stock. We agree that you should never fall blindly in love with a stock. Fools review their stocks at least every time a quarterly earnings announcement. While "Stocks That Are Keen" might have been a more accurate title, in the spirit of the holiday, we're calling them "Stocks to Love." Heck, maybe you'll find your next sweetie in here.
* A "Stock to Love" represents the opinion of one Fool
and in no way should be taken as the opinion of either the Motley Fool, Inc.,
the company in question or representative of anyone or anything else other
than that specific Fool's thoughts. |
A Stock to Love
Intel <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> Shall I compare Intel to a summer's run-up? Before my doggerel starts barking and scratching at fleas, let me switch to prose. A stock I love is Intel. Somewhat to my surprise, it has taken me quite a while to appreciate it. I'm too aggressive an investor for my own good. I'm often looking out for the next monster stock. I look at enormous, established companies and then look away, hoping to discover a more attractive high flier. Foolish? Not at all. Not in the least. We're not all born Fools, you know. Some of us have to learn it and I've certainly learned some Foolish lessons the hard way. I would love Intel even more if I had actually bought it a year ago, when I was pointing it out as a solid performer to more conservative investors than myself. It was priced around $55 then. By the time I began to think about it again few months ago, it had run up to $110. Thinking that perhaps it had appreciated all it was going to in the near future and that it was much less undervalued, I once more looked away. But it just kept climbing. Who needs a small high-flyer when a behemoth like this can prove itself so nimble? What's not to love about a stock like this? Intel is a winner, for many, many reasons. Let me detail a few. It's in the right industry, one which is poised to grow strongly over the coming years. What's more, Intel commands an incredible market share (88%), competing with the not-too-shabby likes of TEXAS INSTRUMENTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXN)") else Response.Write("(NYSE: TXN)") end if %>, IBM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> and MOTOROLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %>. Through a brilliant marketing campaign, Intel has proven that even a virtually invisible component can build solid brand name recognition. With a market cap around an eighth of a trillion dollars, Intel has kept itself growing steadily, pumping lots of cash into R&D (research and development) and doubling chip capacities every eighteen months. Profit margins over the last ten years have crept up from the low teens to the low 20s. According to MF Debit's outstanding synopsis of Intel's 4th quarter conference call, Intel's revenues were up 41% from year-ago levels, and earnings, topping estimates by 16%, were 117% above those of the year before. According to a Hoover's company report, "Intel is the 3rd most profitable company in the US (behind #1 General Electric and #2 Exxon)." You can read more about Intel there, and you might also want to check out Intel's website. It's no wonder that many successful portfolios are stamped with "Intel Inside."
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A Stock to Love
Ben and Jerry's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:BJICA)") else Response.Write("(NASDAQ:BJICA)") end if %> Let's face it: I know little about stocks, but I know a lot about ice cream. Not only do I believe that ice cream is its own food group, but, more importantly, if everyone on the planet could just take a bite of ice cream at the same time we could have world peace. Despite unexpected losses in the fourth quarter of last year, I am still in love with Ben and Jerry's. The losses were taken as a result of new advertising expenses, the results of which should be seen as soon as this quarter ends. (Net sales actually improved over the 4th quarter from 1995.) A nice bonus to this company -- other than the funky flavors and its kooky image -- is that despite it being a $150 million dollar business, it has lots of heart. Ben and Jerry's donates 7.5% of revenues to the Ben & Jerry Foundation, which supports various charities and social causes. My love for ice cream almost assures the investor growth for this stock. And I know you love ice cream, too.
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A Stock to Love
American Eco <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq:ECGOF)") else Response.Write("(Nasdaq:ECGOF)") end if %> Love is a dirty business, but someone has to do it. The dirty business I love is American Eco. The company is primarily involved in waste management as environmental remediation (i.e., removal and disposal of hazardous materials including asbestos, lead and other heavy metals). American Eco also provides specialized support to various industries such as petroleum, petrochemicals and forest products. This includes such services as construction rigging, demolition and facilities repair. In addition, they offer engineering and project management services to help companies evaluate and improve project benefits and reduce associated risks. A dirty business, no? Why get excited about dirt? Dirt represents opportunity. Dirt never ends (at least not in my house). At American Eco, that dirt is translating into cold, hard cash -- lots of it, with more to come. We're talking about growth here. Let's look at some numbers: Rev($M) Inc($M) Shr(M) EPS
FY 1994 34.991 1.008 6.191 0.16
1Q 1995 11.027 0.483 7.191 0.07
2Q 1995 9.079 0.652 6.833 0.10
3Q 1995 7.255 0.744 6.951 0.10
4Q 1995 19.323 0.973 7.217 0.13
FY 1995 46.684 2.852 7.217 0.40
1Q 1996 40.014 1.806 9.024 0.20
2Q 1996 25.069 2.067 9.560 0.21
3Q 1996 25.390 2.399 10.356 0.20
4Q 1996 29.055 2.491 10.847 0.20
FY 1996 119.529 8.763 10.847 0.81
Trailing P/E @ $8 1/2 per share = 10.5
FY 1997 estimates = $1.20 per share (2 analysts)
Forward P/E @ $8 1/2 per share = 7.1
Based on a 50% growth estimate, PEG = 0.21
(on trailing earnings)
Impressive enough? To add to this for 1997 and beyond, American Eco has recently acquired two very respectable companies: Industra Services Corporation and Chempower Incorporated. In addition, they have recently signed a letter of intent to enter a joint venture with CVG International America of Argentina, a region of the world where demand is estimated to be in excess of $500 million. In fact, management has set a goal of $1 billion in revenues for the year 2000 (about 70% annual growth from here) to be achieved via new contracts along with continued strategic acquisitions. Apparently, they feel confident in their ability to achieve this goal since a major stock buyback program was initiated last August. Thus far, the CEO (Mr. Michael McGinnis) has personally purchased over 300,000 shares. I'd say that is confidence. Looking at the sector as a whole (though it can be a little misleading relating Eco's specialization to ordinary "waste management"), the typical P/E is around 20 even though the growth rate is much lower for the sector (about 12%) than for ECGOF. So why is American Eco trading so low relative to the sector? There are two reasons, in my opinion: 1) it is a relatively unknown company which is just starting to gain institutional support; 2) investors' confidence was shaken late last year when the CFO unexpectedly resigned (as best as I can tell it was because the company was growing too quickly and he couldn't keep up). It is this Fool's belief, though, that it will be only a matter of time before American Eco gains the recognition and respect it deserves. Once that happens, it should follow that the company's stock would trade at a multiple more representative of the sector as a whole. For more information, visit the American Eco message folder here in Fooldom (note: old folders can be found in Graveyard XII, XV, XVIII, and XXI). I love dirt! |
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A Stock to Love
RehabCare Group, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: RHBC)") else Response.Write("(NASDAQ: RHBC)") end if %> Jim Usdan is a CEO who loves his shareholders. I really think he does. His company, RehabCare Group, is in the health care outsourcing business. Hospitals often find it too expensive to hire and train their own teams of doctors and physical therapists for rehabilitation after a stroke or surgery. To reduce costs, they can contract with RehabCare Group to supply these specialized teams. Since RehabCare doesn't own the bricks and mortar of the hospitals, it can operate with relatively low fixed costs. The company is small, with a market cap of $100 million. It has made the Forbes list of 200 best small companies for two years in a row, thanks to its return on equity of over 15% and its growth rate of over 20% (due in good part to acquisitions as well as the trend toward outsourcing for health care cost control). While many of the stocks on the Forbes list trade at price-to-earnings multiples that are higher than their growth rates, RehabCare sells for a valuation of only 15 times trailing earnings. So why do I think that Usdan is the kind of CEO who would bring his shareholders flowers and candy? It's because of a record of demonstrating his interest in shareholder value. A powerful statement of this came at the end of January, when his company put out a tender offer to buy back up to 925,000 shares in a Dutch auction at a price of $20 to $22 1/2. This stock buy-back could wipe out up to 20% of the shares outstanding, and will have the effect of boosting the p/e and other multiples. It also practically removes any risk that the stock price could fall below 20 before the offer expires at the end of February. Usdan doesn't sell his shares in the company, and he is sticking to that practice by not tendering any of his holdings in the Dutch auction. His interest in shareholders is also demonstrated by his participation in answering investors' questions on the RehabCare stock board of the Motley Fool on AOL. It is a fairly rare practice for CEO's to enter this rough and tumble arena, and at first it made me wary. I have seen another CEO hype his stock shamelessly using an online bulletin board. But I haven't seen any evidence of hype from Usdan. Just 20% growth and attention to shareholder value. |
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A Stock to Love
The Coca Cola Company <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:KO)") else Response.Write("(NYSE:KO)") end if %> It was love at first sight. How perfect can a stock be? Its color was red (my favorite) and I've been drinking Coke since I was two. The company sells its product just about everyplace in the civilized world, and enjoys 17% earnings growth. When I pulled out of the mutual fund the life insurance agent sold me, it was my first relationship. It rewarded me well, doubling in price. It was so sweet. Now, things are rocky, although I must admit, it's my fault. I've been faithful, but I can't help but question the high PE. How can a stock like this keep growing in price faster than its earnings? Oh, the recriminations are awful. I've been accused of cheating, and many other horrible things. I suppose I should just keep my mouth shut, but I think honesty is important in our relationship. After some serious thought, I decided I needed a breather. I sold some of my position, not all, mind you. I don't want to sever the relationship, I just think I need some time to think. Maybe I need to see some other stocks for a while. However, Coke still tugs at my heartstrings. I've kept the profits in cash, I can't seem to let go. Now I see it's gone to 60 and something today. Am I upset? No, I'm happy for it. You see, it's true love (plus I still own a fair amount of the stock, which helps assuage my jealous feelings). Should you get in a relationship with this stock? I think Coca Cola is a stock to date right now, not bring home to Mom. A nice relationship with its Dividend Reinvestment Plan would probably be the best. Put a little in every month, then if it drops in price, you won't be hurt so bad. However, this may lead to a very long-term relationship. It has with me, and in spite of our hard times, I will always be faithful. |
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A Stock to Love
Rainforest Cafe <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %> My heart still skips a beat for Rainforest Cafe and all its eatertainment splendor. As the themed restaurant chain where every sense is fed (and fed well), young love was unavoidable. While the company has just six restaurants open, it is on course for $96 million in revenues this year. That is $16 million a unit and more than any chain including Planet Hollywood, Cheesecake Factory or Dave & Buster's. By the end of the year, there will be ten more, which makes the enterprise value less than one time next year's sales. Rainforest Cafe has $162 million in debt-free cash which amounts to a little more than $9 a share. Then again, for a company which is averaging between 50-100% Return on Investment once that money is put to use, the cash hoard is actually sandbagging earnings. Given the heady expansion, sales and earnings are more than doubling. The company earned $0.16 per share in 1995, $0.41 in 1996, and is estimated to earn $0.80 a share this year and $1.25 next year. If analysts see the company growing at 50% a year over the next five years, then why is the stock trading at just 18 times next year's earnings, even lower if you back out the cash and interest income? Skeptics abound, as there are plenty of bears in the rainforest. They think themed restaurants are a fad, even though Hard Rock Cafe has been around for 26 years. They think unit revenues will taper off, even though the original unit has had three years of steady sales. They look at trailing sales and earnings without accounting for how a typical investment of $5 million in a unit will yield annual cash flow of about $3.5 million. They fail to see how many units the company can afford to build from the cash vault and cash flow itself. They think people will become bored with the eye candy while two-thirds of the patrons are actually repeat customers who were drawn first by the lush surroundings, then brought back by a superior menu. Critics do not necessarily appreciate the unit economics. Landlords have paid as much as $2-3 million in concessions to get Rainforest Cafe to breathe new life into their malls and attractions. Disney is so impressed with their first unit at Walt Disney World that they are already planning a second one to open at their new animal park there next year. That Disney unit, at the Village Marketplace, has been the star attraction since its summer debut and has become the country's third-highest-grossing restaurant with its expected annual take of about $30 million. Misunderstandings make for some wild opportunities as I serenade in the RAIN. |
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A Stock to Love
Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> Last year I picked Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> as my Valentine's Day Stock to Fall in Love With. I submitted another stock this year (after all, it's only a stock -- you can love more than one at the same time because they don't get jealous of each other), but my love for Johnson & Johnson is still holding strong. So, why do I still love this stock? Actually, for the same reason you hold any great stock -- the story remains largely the same. Johnson & Johnson keeps doing exactly what they've been doing for more than 100 years. The company started out as an innovator and hasn't wavered. They take care of their customers, their employees, and are good neighbors in the communities where they live. They succeed by sticking to these values. It's been quite a year for Johnson & Johnson. Last June, the company was awarded the nation's highest technology honor, the 1996 National Medal of Technology. They received the award because, for more than a century, J&J has successfully taken novel technologies and turned them into new products that have substantially reduced health care costs and have improved the quality of life for people worldwide. This award was followed in September by another award, maybe not as prestigious, but very much in keeping with the company's commitment to its employees. Johnson & Johnson was named one of the nation's 10 Best companies for working mothers by Working Mother Magazine. This is the fifth consecutive year they have been in the "10 Best" list and they have been included as one of the best companies each year since the award's inception in 1986. A major contributing factor for the award is J&J's "Balancing Work and Family" program, which includes four on-site child development centers, a broad and flexible leave policy for family care matters, a reimbursement program for dependent care expenses, resource and referral programs for child care and elder care services, adoption benefits and other forms of assistance. Band-Aid brand adhesive bandages celebrated their 75th birthday in 1996. Tylenol and Pepcid AC, despite heavy competition, remain the leading brands in their respective categories. The company created a major cardiovascular business in 1996 through the successful acquisition and integration of Cordis with their Inverventional Systems business. At year end 1996, they also received several approvals from the FDA for new chemical entities as well as new indications for existing compounds. What about financial results? Lots of good news here, too. Since last year (using yesterday's closing price compared to the closing price one year ago), the stock has given shareholders a great 26.5% return, not counting dividends. The stock split two-for-one last April and the board approved a dividend increase of 15%, the 34th consecutive increase. Currently, the annual dividend is $1.52. Johnson & Johnson just released their fourth quarter and year-end results at the end of January. Sales rose 14.7% in 1996 and earnings per share rose 16.7%. For the fourth quarter, sales increased 13.5% and EPS was also up 16.7%. They were able to achieve these results despite intense competition, unfavorable currency translation, and a higher effective tax rate. The company also improved operating margins. For 1996, gross profit margin improved from an already incredible 66.9% to an even better 67.5%. Over the past 2 years, their efforts to improve gross margins and reduce operating expenses have resulted in profit improvement of nearly $600 million per year -- in an environment of minimal price increases and even as the company increased its R&D investment. So, for yet another year, Johnson & Johnson remains a stock I love. |
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A Stock to Love, Part 2
Sun Microsystems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %> Love can really catch you off guard. That was certainly the case for me with Sun Microsystems. In fact, I kind of eliminated Sun as a contender for my affections until I took a look at their last earnings release. Sun is often dismissed as a "me too" company in the UNIX market, and a "destined for slaughter" company in the desktop computer market against Wintel (Intel/Microsoft Windows). Sun has a surprisingly broad offering, however, and is either the dominant player or a top technical challenger in every market it serves. It is also entering some new markets with strong offerings. The markets it owns or dominates include the "power desktop" market and the "mid-range server" market. Sun is the number-one UNIX player and outships its next three largest competitors combined in that marketplace. This is also a very profitable market for it and a key driver to its huge profit margins, which came in at 50.4% last quarter. Sun, in fact, doesn't even pay attention to margins because it can pretty much name its prices in these markets and have incredible flexibility to compete against all comers. Sun competes head-to-head with Wintel in the volume desktop market, but has a strategy employing a zero administration, thin client, Java station architecture on the low-to-middle end. They think, in the long term, that this is the right answer for this market. They also have introduced a new SPARCstation 5 model featuring twice the performance of its predecessor at a price that is 30% less. So they have a couple of options to compete in the segment. Two new markets Sun plans to attack aggressively are polar opposites of each other. One is the embedded market -- the extreme low-end that includes personal digital assistants (PDAs) and other hand-held devices. Sun is addressing this market with a different strategy than competitors such as MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> and APPLE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %>. It's using the Java machine and Java chips that give it some distinct advantages. The other market is the high-end server market currently dominated by mainframes. Sun recently introduced its Starfire line of products for this marketplace. Sun likes this market because there is a lot of opportunity for very big deals and very high gross margins. Financially, the company is rock solid. They have $750.7 million in cash and cash equivalents and total current assets totalling nearly $3 billion. They are systematically repurchasing stock. They manage their inventory, cash, and receivables well. They expect revenue growth to continue in the range of 20% quarter over quarter. Last quarter their earnings per share grew 41% over the same period a year ago and are currently estimated to grow in the 27-30% range for the next two quarters. For FY 1997, analysts now expect Sun to bring in earnings per share 35% above 1996. The real key here is Sun's strong and dominant position in its core markets combined with the potential of the new markets it is attacking. The stock is pretty close to being fairly valued based on YPEG calculations. If they do well in the new markets, there is upside potential. |
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A Stock to Love
Dave & Buster's, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DANB)") else Response.Write("(Nasdaq: DANB)") end if %> Usually, I write about some high-tech specialty chip manufacturer such as C-Cube. However, for Valentine's Day, I'm going to trade in my silicon chips for a company that has more in common with potato chips. I'd like to talk about a new theme restaurant that I recently had the pleasure of visiting -- Dave & Buster's. In the days of my misspent youth in the DC area, I was a bartender of some notoriety. Those days are long gone, however, many of the friendships I developed "behind the wood" remain. Two months ago I started receiving phone calls from old friends still bartending or involved in the restaurant business. The conversation always started with, "Bruce, have you checked out Dave & Busters at White Flint Mall? It's like no other place." Curious, I decided to brave the winter cold on a Saturday evening to check out the new "hot" theme restaurant in D.C. (Not that it was terribly difficult for me to travel to Dave & Buster's, since I live five minutes from the Mall.) Dave & Buster's was easy to find -- it occupied almost the entire third floor of the mall! Not only was it easy to find because of the 60,000 square feet it occupied, but the line to get into the place was a two-hour wait. I decided to go back on a Sunday afternoon. On Sunday afternoon I arrived to see what was generating such excitement. What I discovered was a place catering to adults with food, drinks, and games. I mean all types of games -- there were pool tables and shuffleboard tables and blackjack tables, but most of all there were lots and lots of virtual reality games. Indeed, it was "like no other place", which happens to be their slogan. Even on a Sunday afternoon the bar was crowded, the restaurant was full and all the games taken. It reminded me of a casino without the desperation. My investment instincts started taking over, so I decided to do some further investigation. Dave & Buster's operates nine theme restaurants dedicated to entertaining adults. Each restaurant has a theater, several bars, a restaraunt, pool tables, and a huge midway filled with virtual reality games. Revenue comes 55% from food and beverage and 45% from gaming. Dave and Buster's plans to open four more restaurants this year (the next one in March), four next year and five the year after. That is 155% planned growth in units in only three years. If margins are maintained, or improved through economies of scale, the unit growth will translate into 155% growth in earnings over the next three years. Revenue and earnings growth come mainly from additional units. Therefore, since Rockville was the newest unit, I was curious about the incremental revenue generated by the Rockville store. Casually, I walked over to a bartender I knew and asked, "Geez, what does this place do a night?" He smiled and said, "I think we are averaging 550K a week." Quickly figuring, I realized that makes for monthly revenue of two million, or over six million per quarter -- that's just for one unit. Applying a margin of 7.5% (historical margin for other units) gave me $495,000 in earnings from the store. Divide by 7.3 Million shares outstanding gives me incremental earnings per share of $0.07. Add the $0.07 to the previous quarterly earnings and I get $0.27 for the quarter. Guess what? That is exactly what the analyst were predicting. Turns out I didn't have to do all that calculating anyway. Two weeks later, Dave and Buster's said that they felt they would do 27,000 million in Revenue for the quarter, which works out to $0.27 per share. They also announced that construction of their tenth unit in California was completed ahead of schedule. Not suprisingly, Dave and Buster's trades at a price-to-earnings ratio around 25 with a growth rate of around 25% for current year. It is followed by six analysts and is pretty much fairly valued at its current price of 22. However, I love this company because the market is so unique and untapped. It has good potential growth by simply opening new units in different cities. Just nine more units doubles its present size and those units are already planned. Barriers to entry for competitors are high because of the unique size and cost of building a similar theme restaraunt. Furthermore, Dave and Buster's simply packs them in every night. However, most of all I love Dave and Buster's because it is so easy for me to check on my investment a la Peter Lynch. Was the food good? Was the bartender pulling a crowd? How crowded was the game room (under 21 not allowed in by the way)? What was the average tab? All these questions I can answer over a beer with friends inside the company "factory." Best of all, there are no terawatt gigafiber optic servers in the backbone to try and understand. Pass the pretzels. |
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A Stock to Love
Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> For nigh on three years now, I've been in love with Dell Computers. I've followed this stock up and down, through tech rises and tech crashes. I've played with calls and puts with Dell, back in my less Foolish days. But somehow, I never got around to buying the stock -- dumb. Nevertheless, I love this stock. Here's why. Back in March of 1996, it occurred to me that my son was graduating high school soon. Since he was going to college, he'd be needing a computer. Being in the business I was in, I had lots of contacts with people in the computer industry. I asked them all what computer they thought I should buy. The answer? Dell, hands down. Computer guys, with knowledge of all the brands, all picked Dell. So, I gave Dell a call. What an experience. The customer service guy was helpful and polite. He took the time to go over what I needed and put together the perfect computer for my needs. He was helpful in a way no store clerk ever is. I came away from that completely satisfied. Later that year, we bought another computer. I figured we could get a better deal at a computer store. We ended up with a Compaq. Needless to say, this was not my Dell. The Compaq was klunky and overladen with useless software. So, my son got the Compaq, I got the Dell. Heaven on earth. I was happy again. The time came when I had to mess with the inside workings of the computer. Scary business, the hard drive and all. So, I called Dell's tech support. The tech guy (I guess I'm supposed to say guru here) was wonderful. Here I was, completely computer illiterate, asking for help with the hard drive. He was patient. He was helpful. He spent two hours with me, checking everything. I learned more in those two hours than I had in months with the books. Know how much all that personal attention cost? That's right, nothing. Meanwhile, the first thing Compaq wanted to know was where to bill the $35 fee. So, what do we have here? We have a computer that is an excellent piece of equipment. We have tech support that is unparalleled. We have competitive prices and considerate customer service. We have a company whose main concern is the satisfaction of the customer, not all the garbage they can tack on in order to charge more. Now, I could tell you how Dell has increased earnings quarter after quarter, year after year, or how they consistently beat the street estimates. I could tell you how First Call anticipates a 137% increase in earnings for the coming quarter over the year-ago quarter, with earnings for FY 97 coming in 95% above FY 96. I could tell you how the company has continued positive cash flow, or how it has a YPEG price target of $97.50 with the stock now at $66 11/16. There's lots I could tell you about the numbers for this company. I could also go on about how the company has received award after award for their computers, or how management has continued to move forward with newer ideas for network computers, or how well received their business models are. I could tell you that they're expected to grow over 30% by FY 98, maintaining a 25% growth rate for the next 5 years. Sure, I could tell you all that. But what I love about Dell isn't in the numbers -- it's in the computer, and it's in the customer service. Here we have an outstanding product that sells better than most computer manufacturers' products, without glutting stores with any over stuffed products or any mine-is-better hype. Through mail order, they even save you sales tax. What I love about Dell is that my needs come first. And they fulfill them very well indeed. With all that's in its favor, is there any question as to why I love this stock? Not from where I'm sitting, which, by the way, is in front of my Dell. Happy St. Valentine's Day! |
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| * A "Stock to Love" represents the opinion of one Fool and in no way should be taken as the opinion of either the Motley Fool, Inc., the company in question or representative of anyone or anything else other than that specific Fool's thoughts. | |
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