Dell Shares Join The Hit List (DELL, INTC, AAPL, HPQ, IBM)

We had an interesting ticker on the 52-week low club this morning right after the open: DELL.  Dell Inc. (NASDAQ:DELL) shares traded down more than 2% under $21.60 right after the open today.

The coming MacWorld may be a part of the blame.  Apple (NASDAQ:AAPL) is believed to be bringing more notebook computer offerings with Intel’s (NASDAQ:INTC) Silverthorne chipsets are small, strong, and low in power consumption.  This may allow Apple to do much more with its notebook lineup than the traditional tablet PC’s that have been on the market.  To date, tablet PC’s have not produced the sales numbers that lived up to the hype of say back in 2003 (when I bought a tablet PC).  Lastly, these driveless laptops and notebooks with flash drives may allow Apple a further inroad into where both Dell and Hewlett-Packard (NYSE: HPQ) have led the field. H-P shares are down over 1% now too, although H-P would have to drop 20% to challenge its 52-week lows.

Dell’s prior 52-week low was $21.61 (from March 2007 after Michael Dell had taken control again) and shares closed at $22.09 on Friday.  Shares were just at $24.00 last Wednesday before the NASDAQ was thrown into the river.  Just in November Dell shares were trading at $30.00.

The good news is that shares are back above that $21.61 level.  The bad news is that the economy is slowing to a stall if not a recession, and now the worry is that tech spending from businesses and consumers alike may not be able to hold up with the near-immunity that was hoped for even just a month ago.

Dell’s entire model has been shaken up with the new retail initiatives for on-site sales rather than web and telephone.  Many reviews still comment about the old horrible service issues that Dell has been trying to get put farther in the past.  Dell will have a monster share buyback in the near future if it hasn’t started already.

Part of the reason also being tied to this is that IBM downgrade from UBS, although IBM shares are down less than 1%.  We’ll see if the "Dell Lounge" at the Consumer Electronics Show ends up being a pit of excitement or another point of criticism.

Stocks hitting 52-week lows rarely do so only once.  Technicians and momentum traders tend to bolster stocks on new highs and tend to add pressure to stocks on new lows.  Highs and Lows are often thought of essentially as a trader HIT LIST.  But what iscurious now is if this is just the market trashing anything tied to theconsumer or if the market is starting to not believe in Michael Dell’snew initiatives.  This situation is still somewhat fluid, so stay tuned.

Jon C. Ogg
January 7, 2008