The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (May 21, 1997)

DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> smoked Wall Street analysts' expectations after the bell yesterday and came close to becoming the first Workshop stock to double on the year. Dell's earnings more than doubled from the same period last year, and blew expectations away by 15 cents a share.

The long-term chart for Dell certainly tells the story behind the computer maker's success. The stock closed out the 1980s at 93.75 cents a share (split-adjusted). Today it traded at $107 a share. That's only an annual compounded growth of 89% for the last seven years, five months. Makes you drool a bit, doesn't it?

By itself, Dell has the Relative Strength screen leading the pack in the annual year-to-date rankings. (Without Dell, the other four stocks are in the red so far this year.) This is one of the big dangers in putting too much emphasis on short-term results with these concentrated screens. Any anomaly (positive or negative) can distort the approach's real power to choose winners.

One part of the technology sector that did not profit from Dell's earnings report was the disk-drive makers. Dell reported that its own costs were lower-than-expected, meaning the components it has to purchase from the likes of SEAGATE TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %>, WESTERN DIGITAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WDC)") else Response.Write("(NYSE: WDC)") end if %> and QUANTUM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QNTM)") else Response.Write("(Nasdaq: QNTM)") end if %>.

Nevertheless, the tech sector continues to enjoy the recovery after its slow start to 1997. Fool on!

Monthly Growth Screens
(Jan. 3 to present)
23.47%  Relative Strength  
12.21%  S&P 500 Index  
10.77%  Low Price/Sales  
-0.33%  YPEG Potential  
-3.51%  Investing for Growth  
-8.21%  Unemotional Growth  
-16.67%  EPS Plus RS  
-26.66%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
14.70%  Dogs of the Dow  
13.06%  Dow Jones Ind Avg  
8.26%  Beating the S&P  
4.36%  Unemotional Value  
4.36%  Beating the Dow  
3.67%  Dow Combo  
-2.29%  Foolish Four