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Dell Inc. (DELL) Hits 52-Week on Service Deals

Jul 05 2011

Set to announce its most recent earnings on August 16th, Dell Inc. is expected to earn 48 cents a share. The company has been able to beat earnings estimates the past four quarters, earning 55 cents a share in April while analysts were looking for 44 cents. The current quarter has seen expectations rise from 44 cents to 48 cents over the past three months. Revenue is also showing improvement with a yearly 4.10% increase over the same period last year.

A low P/E ratio of 10.16 makes the stock and company interesting for value investors. When compared to the current years’ growth of 19.50%, the stock price is very attractive. Growth next year of only 1.10% creates some value issues.

In a recent article by Zachs, a number of different deals are outlined that demonstrate Dells ability to win contracts and grow earnings. A five year contract with Towers Watson & Co provides the opportunity for Dell Services to assist in making Tower’s data centers more efficient while lowering operating expenses according to the report. Other deals are mentioned including Hyatt Hotels, the Nuclear Regulatory Commission, TUI Travel Plc., and the Brooklyn Hospital Center.

A good number of 16 Call Options for July were traded today with strike prices of 17 and 18 more popular in August. With the company’s stock chart in a clear buy position you could purchase the stock ahead of earnings or purchase a smaller number of Call Options and liquidate your position before the earnings are announced for a safe trade.

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