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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: chaz who wrote (15902)1/22/2000 3:46:00 AM
From: Mike Buckley  Read Replies (3) of 54805
 
EMC/NTAP ratios:
Market Cap: 7:1
Sales: 12.5:1
Net: 22.8:l

It's a set of numbers like that which makes me wonder about valuations. If an investor knows relatively nothing about either company, that set of numbers begs some valuation questions to be answered in thorough research, such as:

1) In the long term, what is it about NTAP that merits a market cap only 1/7 EMC's market cap when it's sales are 1/13th EMC's sales and when it's earnings are 1/23 EMC's earnings?

2) Is it possible that EMC is relatively inexpensive, that NTAP is relatively expensive, that both are relatively expensive but NTAP is more expensive, that both are relatively inexpensive but EMC is more inexpensive, etc?

3) Depending on the answer to #2, am I better off looking at other product categories in which to play Gorilla/King Games, or am I better off playing those games in this turf?

--Mike Buckley
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