2iQ Insider Brief: Dell Technologies Inc (DELL: US)

Desislav Delchev 3 April 2020

Dell Technologies Inc (DELL: US)

12-month performance: -40%
Insider activity: Bullish
Buying pattern: Large purchase from CEO
Recent news: Withdrew FY2021 guidance

Dell Technologies is a provider of information technology (IT) solutions. Operating through two business segments, Client Solutions and Enterprise Solutions Group (ESG), the company offers computer hardware, server, networking, and storage solutions, as well as cloud-enabled data analytics and infrastructure management services. Dell is listed on the New York Stock Exchange and currently has a market capitalisation of $27.3 billion.

Dell’s near-term sales are likely to be impacted by the economic slowdown associated with the coronavirus. Recently, the company withdrew its FY2021 guidance due to the rising level of economic uncertainty associated with the outbreak. However, there is a possibility that Dell’s sales may not be affected as badly as some investors fear. This is because the company is likely to experience a pick-up in laptop orders as a result of the work-from-home trend.

dell chart       Source: 2iQ Research

Examining insider transaction activity, it’s interesting to see that Dell Founder and CEO Michael Dell purchased a large number of shares recently. DELL shares have been crushed in the recent coronavirus market crash – falling from above $50 in mid-February to just $25 on 18th March – and the CEO has taken advantage of this share price weakness to add 828,199 shares ($26.3 million worth of stock) to his personal holding. This large purchase – his first since 2017 – suggests that the insider expects the stock to rebound. Given the size of this purchase, we think the medium-term outlook for Dell is favourable.

Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.

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