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Switching Laptops

Published:05.02.2024 22:02 PM

Analyst:

Stephan Jöhri • CTO

stephan.joehri@adviscent.com • +41 1111111

Lenovo Group Limited (LNVGY - Get Rating) and Dell Technologies Inc. (DELL - Get Rating) are two of the world’s largest computer manufacturers. LNVGY manufactures and sells consumer personal computers, servers and workstations, and a family of mobile internet devices. DELL operates through three segments—its Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware.

Personal computers have resurfaced as an essential device since stay-at-home mandates amid the pandemic have forced people to rely on them more than ever for work, school, socializing and entertainment. Though the world is slowly defeating the pandemic, behavioral changes like digital learning and flexible working are expected to continue. This, we think, should keep driving the demand for PCs and create a host of new opportunities for industry leaders like LNVGY and DELL.

While LNVGY gained 103.7% over the past year, DELL returned 90.9%. In terms of past six-month performance, LNVGY is the clear winner with 97% gains versus DELL’s 28.1%. But which of these stocks is a better pick now? Let’s find out.

While both LNVGY and DELL can be considered good long-term investments given their market dominance and flexible business model, LNVGY appears to be a better buy based on the factors discussed here. LNVGY’s superior financials and relative undervaluation make it a better investment option compared to DELL.

Our research shows that the odds of success increase if one bets on stocks with an Overall POWR Rating of Buy or Strong Buy.

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The investment case for Dell Inc. can be evaluated by considering various factors that influence its financial performance, growth prospects, and competitive position in the market. Here are some key aspects to consider when making an investment case for Dell:

Strong Market Presence: Dell is a well-established and recognized brand in the global technology industry. The company has a long history of providing hardware, software, and services to a diverse range of customers, including businesses, government agencies, and consumers.
Diversified Product Portfolio: Dell offers a wide range of products, including laptops, desktops, servers, storage solutions, and networking equipment. This diversity allows the company to cater to different market segments and adapt to changing consumer preferences

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Lenovo Group Ltd, with its diversified product portfolio, global reach, commitment to innovation, and financial stability, presents an attractive investment opportunity. The company's strategic focus on sustainability and ecosystem synergy aligns with evolving market trends, while its undervaluation offers the potential for substantial returns. However, investors should be mindful of competitive pressures and geopolitical risks. Overall, Lenovo's strong fundamentals and growth prospects make it a compelling option for long-term investors seeking exposure to the technology sector.

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* Positive performance in the past is no guarantee of positive performance in the future. The risk of price and foreign currency losses and of fluctuations in return as a result of unfavorable exchange rate movements cannot be ruled out.

General risk information

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Risk information for single stock/single bond recommendations

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Essential sources of information

Our analysts draw on publicly accessible information we consider to be reliable. For the compilation of the analysis, publications by domestic and foreign media and news services (e.g. Reuters, Bloomberg, VWD etc.), business publications, trade publications, statistics and rating agencies were used, together with information from the issuers of the analyzed securities – mainly via the Internet, but also in writing or by telephone. We also procure information from investment banks (sell-side research and primary research).

Reference regarding valuation rates

Unless otherwise stated or specified, the rates used in the analysis are normally the share prices provided by the news agencies Reuters and/or Bloomberg at the close of the stock exchange of the domestic market of the analyzed security or the relevant principal market of this security on the respective local stock exchange on the eve of the day of compilation.