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Cramer Wonders What Goldman Sees in Dell

Tickers in this article: GS DELL MSFT HPQ STX
NEW YORK ( TheStreet --

Debra Borchardt:

Goldman Sachs (GS) upgraded Dell (DELL) . So Jim, do you agree with this call? Because -- I mean -- last week they upgraded Research In Motion (RIMM) and we all scratched our heads and went, "Huh?"

Jim:

I know.

Debra Borchardt:

And now we're doing it again. We're, "What the what?"

Jim:

Yeah. I always feel that when you go from a "Sell" to a "Buy" you must know something. Now maybe that's antiquated view of things, but when you've got such a strong conviction that something is going lower, and then you go to such a strong conviction that it's going higher, I really feel that you either know there's a special dividend or you computing some model that the company isn't going to disagree with. Michael Dell feels passionately that the future of the PC is much stronger than people think, and the future of their enterprise business is much stronger, and that this is just a cyclical decline not a secular.

Debra Borchardt:

The tablet's just a shiny new toy and we're going to go back to the PC?

Jim:

It doesn't replace the PC. Now I think if you spoke to the people at Apple (AAPL) they would totally disagree, and that it is going to replace the PC. So this is fundamentally a call, I think, of saying that what does Michael Dell think because he owns so much? And he has been upset about his stock, but by the way, just be really clear here, he has never said that business is good.

Debra Borchardt:

No. He's been very upfront that it sucks.

Jim:

Yes. It's just that there's been...I was referencing Steve Luczo this morning, he's the guy who runs Seagate (STX) , that he at one other time felt that Seagate was being unfairly valued. So he took it private. That's what happened to Dollar General (DG) . There were was unfair value, took it private. Maybe there's a way to be able to, if the company, Dell, were to go private, to do things that would bring out growth, not in a public sphere. So I don't want to do this because I don't have a case to be made fundamentally for you, for Dell, or for Hewlett-Packard (HPQ) . Both of them had that same problem.

Debra Borchardt:

Right.

Jim:

Hewlett-Packard seems cheap too, but I don't want to...

Debra Borchardt:

But that was one of his comments was that, "Gosh. Our expectations of this company are so low that, I guess, they could beat that." And I kind of hate that as an excuse.

Jim:

Right. That's not enough because we all know that if the expectations are lowered dramatically then you can beat them, but that's not really the call. The call's like that there's a lot of value here, and I just think the value dissipates.