DELL

Dell Technologies Inc - Ordinary Shares - Class C

TMT, Event Driven/Special Sit


Presented:10/14/2021
Price:$106.00
Cap:$81.10B
Current Price:$125.83
Cap:$91.67B

Presented

Date10/14/2021
Price$106.00
Market Cap$81.10B
Ent Value$114.30B
P/E Ratio21.92x
Book Value$6.31
Div Yield0%
Shares O/S765.12M
Ave Daily Vol2,075,439
Short Int4.20%

Current

Price$125.83
Market Cap$91.67B
Dell Technologies, Inc. is a holding company, which engages in the provision of information technology hardware, software, and service solutions through its subsidiaries. It operates through the following segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware. The ISG segment includes servers, networking, and storage, as well as services and third-party software and peripherals that are closely tied to the sale of ISG hardware. The CSG segment consists of sales to commercial and consumer customers of desktops, thin client products, and notebooks. The VMware segment provides compute, cloud management, networking and security, storage and availability, and other end-user computing offerings. The company was founded by Michael Saul Dell in 1984 and is headquartered in Round Rock, TX.

Publicly traded companies mentioned herein: Dell Technologies Inc (DELL), HP Inc (HPQ), VMware Inc (VMW)

Highlights

The presenter is long shares of Dell Technologies Inc (DELL), believing it results in an undervalued IT player. DELL currently trades at ~$105 per share but is spinning-off VMware in Q4’21. As of the company’s most recent Analyst Meeting (slide 4), VMware represents roughly half of that value. He thinks that owning DELL and shorting VMware allows investors to create standalone DELL at a low-$40 share price. He thinks standalone DELL should generate ~$6 of earnings in 2022 and that the stock should trade at ~$60 per share. If DELL deploys capital efficiently and fundamentals hold up, he thinks the company could exceed his $6 earnings estimate.

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Idea Discussion

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