OptionsHouse

Options Trading News

January 15, 2013  Tue 8:14 AM CT

DELL: SEE CHART GET CHAIN FIND STRATEGIES
Dell is hard to resist.

Here's why: Business could be turning. I don't think people realize how far along Dell is toward not just being a personal computer company. Dell a service company. It has a PC division, for certain, but it is losing share to Hewlett-Packard and Lenovo.

It has spent a fortune turning itself into a one-stop provider for companies in the United States and Europe, and it's a big government contractor pretty much around the world.

TheStreet.com logoAnd we have a very motivated guy. Michael Dell is tired of being a whipping boy. He has a really good business that is in a cyclical trough and another business that is in a secular decline, but he has mastered both and can handle the latter while improving the former.

Lots of cash, lots of cash flow. I think it can work.

I keep thinking about that moment when Goldman Sachs went from "sell" to "buy" in one day, pointing out that a takeover could be upon us. If we get one, it isn't going to happen this low. It will happen much higher.

In the interim, I don't think there is as much earning risk as people think--at least in the second half, when I believe the huge spend on enterprise services will indeed pay off.

Disclosures:
Cramer's charitable trust has no positions in the stocks mentioned.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »