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Chad Brand submits: Dell Inc.'s (NASDAQ:DELL) stock has a special place in my heart. It was my single greatest stock purchase, and very well could remain that way for the rest of my life. I bought shares in January 1996 for 94 cents each (split adjusted) after the stock got hammered as the company stumbled with its notebook computer line. Dell peaked at $60 as the Nasdaq passed 5,000 in early 2000.

Why do I bring this up now? I haven't owned the stock in years, but I am now taking a look at it again. Pricing pressures have compressed margins and sent shares down to $24 each. Dell has elected not to use Advanced Micro Devices' (NYSE:AMD) chips in its boxes, and as a result, they have had a hard time competing with those suppliers that do diversify away from Intel's (NASDAQ:INTC) more expensive offerings.

I am not saying that Dell stock is poised for the late-1990's-like ascent. Those days have long passed. However, Dell now trades at a discount to IBM (NYSE:IBM), and that makes little sense. Dell has $5 in net cash per share on its balance sheet, taking its enterprise value down to $19 per share. That's a trailing P/E ratio of merely 12.

Is Dell going back to $60 anytime soon? Not a chance. However, for those looking for cheap large cap values in technology, the current valuation the market is assigning Dell implies extreme pessimism about the company's future. The January 2008 $20 call options look especially attractive at $7 each.

Source: Dell's Demise: Time To Take A Look (DELL)