Dell Computer Corp. Essay, Research Paper
DELL COMPUTER CORP.
Dell Computer Corp. was founded in 1984 by Michael S. Dell. Four years later in 1988, Dell became a publicly traded company with 3.5 million shares at $8.50 each. Four more years later, Dell was ranked in the Fortune 500 roster with Michael Dell as the youngest CEO to be ranked on this list. In 1996 Dell?s stock raises to about $100 per share pre-split. One year later this number is multiplied by 10 and stock is up to a startling $1000 a share pre-split.
Date Event Per-Share Price Presplit Stock Price
June 22, 1988 Initial Public Offering $8.50 —
April 9, 1992 Three-for-Two Split 25.81 38.72
Oct. 27, 1995 Two-for-One Split 45.00 135.00
Dec. 6, 1996 Two-for-One Split 56.75 340.50
July 25, 1997 Two-for-One Split 81.50 978.00
March 6, 1998 Two-for-One Split 69.25 1,662.00
Sept. 4, 1998 Two-for-One Split 54.75 2,628.00
March 5, 1999 Two-for-One Split 43.03 4,131.00
Jan. 28, 2000 Close of Last Quarter 37.25 3,576.00
Also in 1997, Internet sales reached $1 million per day. In 1999, a mere fifteen years since the start of this company, Internet sales reach $35 million per day. Dell Computer Corp. is ranked No, 4 in the Fortune 500 ranking, and Wall Street named it the No. 1 return in total return investors over the past three, five, and ten years. Also in the past 15 years Dell Computers? total sales have grown from $6 million to $23.6 billion!
Since 1995 Dell stock has had a slow but steady increase:
The top six competitors to Dell are Compaq Computer Corp., Gateway Inc., Apple Computer Inc., Micron Electronics Inc., Bitwise Designs Inc., Paravant Inc., and Hertz Technology Group. Dell Computer Corp. is worth about four times the amount of its closest competitor, Compaq Computer Corp.
Company Name Symbol Mkt Cap (000’s)
DELL COMPUTER CORP DELL $120,402,198
COMPAQ COMPUTER CORP CPQ $44,785,125
GATEWAY INC GTW $20,594,558
APPLE COMPUTER INC AAPL $19,722,642
MICRON ELECTRONICS INC MUEI $1,709,236
BITWISE DESIGNS INC BTWS $188,291
PARAVANT INC PVAT $57,077
HERTZ TECHNOLOGY GROUP HERZ $13,439
The following graph is a graph of Dell Computers and its leading competitors:
The CEO of Dell Computer Corp. is of course Michael Dell. He started the company with a mere $1000 and has turned it into a multi-billion dollar computer giant. Mr. Dell attended The University of Texas at Austin. In 1999, Mr. Dell wrote the bestselling book Direct From Dell: Strategies That Revolutionized an Industry, his story of the rise of Dell Computer Corporation and the strategies he has refined that apply to all businesses. He is a member of the Board of Directors of the United States Chamber of Commerce, the World Economic Forum, and the Computerworld/Smithsonian Awards. Mr. Dell serves on the nominating committee for the National Technology Medal of Honor, and is a member of The Business Council. He is also a member of the Computer Systems Policy Project.
Kevin B. Rollins serves as vice chairman for Dell Computer Corporation. He is responsible for worldwide sales, marketing and service and for overseeing Dell’s Worldwide Home and Small Business Group, European operations, and the Personal Systems Group. Mr. Rollins earned his master’s of business administration and bachelor’s degrees from Brigham Young University.
James T. Vanderslice, Ph.D., serves as vice chairman of Dell Computer Corporation. He shares the Office of the Chief Executive Officer with Michael S. Dell, chairman and CEO, and Kevin B. Rollins, vice chairman.
Prior to being elected to his current position in December 1999, Dr. Vanderslice, 59, served as senior vice president and group executive for IBM’s Technology Group. During his 33-year career with IBM, Dr. Vanderslice led various global businesses for IBM, including its communications-products division, manufacturing and development for the company’s Asia Pacific Group, and the computer-products division.
The employees of Dell Computer Corp. are very well educated and have to have much experience in their particular field of employment to even be considered for the position. Here are two examples:
Major Accounts Manager:
This position requires a Bachelor’s degree or equivalent with a minimum of 8-9 years or related experience in the PC industry and 5 years experience in Sales and Marketing with a good understanding of Dell products and services. This position requires 2-3 years of selling to accounts in the K-12 market segment. Proven experience selling into major accounts, and account management proficiency, is required
Counsel:
This position requires a JD degree and at least one state bar admission. A minimum of 7 years related experience in law firm or corporate legal environment, with a focus on federal government contracts is preferred. Some management experience is also preferred. The candidate must have a strong working knowledge of the requirements for selling commercial products to the federal government, as well as some experience in being familiar with the legal issues associated with selling commercial products to state and local governments. Someone who understands these legal issues from the commercial perspective in addition to the governmental perspective is preferred. The candidate must have excellent communication skills, both written and spoken, and be a team player. The ideal candidate will be a self-starter, with strong communicationskills, and be able to effectively interact with a high-energy client base
Analysts rate Dell Computers at a very strong buy. If you have the money this would apprently be a good choice.
Analyst Ratings Today 1 month ago 2 months ago 3 months ago
1=Strong Buy 14 14 14 13
2=Buy 18 18 17 14
3=Hold 3 4 5 7
4=Sell 0 0 0 0
5=Strong Sell 0 0 0 0
Consensus (mean)(strong buy) 1 – 5 (strong sell) 1.63 1.68 1.69 1.78
Also, Analysts predicate good fortune for Dell as well. The stock has been going up and they predicte it will continue to go up and up as shown by the following charts:
Consensus EPS Estimate ThisQtr04/2000 NextQtr07/2000 This FiscalYear01/2001 Next FiscalYear01/2002
Avg Estimate (mean) $0.17 $0.21 $0.92 $1.21
# of Estimates 19 18 29 15
Low Estimate $0.15 $0.18 $0.85 $1.05
High Estimate $0.21 $0.23 $1.04 $1.40
Year Ago EPS $0.16 $0.19 $0.68 $0.92
EPS Growth 5.9% 9.4% 35.6% 31.3%
Earnings Growth Last 5 years Last Fiscal Year This Fiscal Year Ave Est Next 5 years P/E(FY 2001) PEG ratio
DELLIndustry Rank: 2 of 6 68.0% 35.6%(01/2000) 31.3%(01/2001) 33.7% 51.01 1.51
Long-term Growth Avg Est Low Est High Est Estimates
DELL 33.7% 17.0% 50.0% 25
So all in all, Dell is a very strong company even though it is only 15 years old. It was started by one man with $1000 and is now the number two computer company in the world and the number one computer company in the United States. Over that short fifteen years, Dell has increased its sales by 40 times! And it is not stopping there. The company is continuing to grow and the stock prices are growing with it.
SOURCES:
http://www.dell.com
http://www.quicken.com/investments/quotes/?symbol=dell