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Dell Computer Corporation (DELL) Message Board

  • btv104 btv104 Feb 12, 2013 11:57 AM Flag

    Deal Valuation

    There are a lot of arguments about where the DELL deal will ultimately be priced, but so far I haven't seen anyone talking about earnings multiple for valuation.

    At $13.7x the PE is under 9.5

    I don't understand why a price tag that is less than 10yrs of earnings is reasonable even for the brand name. Dell is a sustainable business with growth opportunities, has a strong brand, and excellent industry connections. Why would anyone think that 10 times earnings is reasonable. 15 or 20 times makes a lot more sense.

    I still think the stock peaks around 20 and the firm is sold in the $15-17 range.

    Can anyone help me understand why this should be done at such a low multiple?

    Anyone have an idea of what they think would be a fair multiple?

    Sentiment: Buy

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