Dell Inc. (DELL), Hewlett-Packard Company (HPQ), Intel Corporation (INTC): Right Time to Short This Giant

Bottom line

According to recent updates Blackstone has fallen out of the Dell race, citing much of what has been discussed above as the primary reason. According to Blackstone, the PC industry has further deteriorated since the talks started and they no longer consider Dell Inc. (NASDAQ:DELL) a good buy. The company shares have fallen approximately 5% since the Blackstone news broke. I have previously advised investors to stay away from Dell, but with recent developments Dell is an attractive short target.

If we use Hewlett-Packard Company (NYSE:HPQ)’s forward P/E of 5.6x on Dell 2014 consensus EPS estimates we get a target price of $9.3. This shows that at current levels and without a buyout deal, there is a 30% downside to Dell Inc. (NASDAQ:DELL). There is minimum risk for shorts because even if the Silver Lake bid goes through the stock is already trading pretty close to the proposed offer price of $13.65.

The article Right Time to Short This Giant originally appeared on Fool.com.

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