A Further Look Into Dell (DELL)

Dell DELL has been out of favor for as long as I can remember. It's been at least 5 years since the company was really relevant, and perhaps ever longer. Despite this, the company is generating tons of cash, has an experienced management team, led by the company's founder, Michael Dell and has some big investors in the name. Does this make Dell a buy? Taking an indepth look at the company, shows some strong metrics and a cheap valuation. The company has more than $12 billion in cash on hand, a high return on equity (28%), and is growing its revenues at 21% year over year. The company is transforming itself into a competitor with IBM IBM and Hewlett-Packard HPQ, especially with its move into cloud computing, Boomi. The company has thought about going private, as evidenced by this interview with the company's CFO, Brian Gladden. At 10 times next year's earnings, DELL is fairly cheap and no one is talking about it. That's what makes it compelling. Ultimately I do not believe that DELL goes private anytime, but I do believe that shares are grossly undervalued, and could hit $25 by the end of 2011, and if DELL ever gets its brand cache and mojo back, shares could be a double from these levels. Disclosure: no position