Here's another.
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4. The King of Data Storage (EMC)
Thursday, December 17, 1998
The demand for data storage continues to mushroom, and
growth stock investor Carlton Lutts says stock in EMC
Corporation (EMC) stands to mushroom in kind. EMC is the
largest and fastest-growing player in the enterprise storage
market, meaning data storage products for mainframes, open
systems and computers attached to networks.
EMC has grown revenues from $190 million in 1990 to today's
$4 billion. Sales are growing at 35% yearly while earnings
have grown over the past three quarters by 27%, 44% and 52%
respectively. Lutts says profit margins are also expanding
and now stand at 20% after taxes. EMC management expects to
own 35% of a $35 billion market in 2001 (they now own 30%),
and Lutts predicts EMC will become a $12 billion company.
More and more of EMC's revenues are coming from software.
For instance, the firm is doing a good business in selling
proprietary software that enables customers to optimize the
firm's hardware. Management expects software revenue to
double to $400 million in 1998, and they are so bullish that
they plan to spend over $1 billion in software research over
the next three years. "The firm is highly profitable and
should become even more profitable as the software end of
the business becomes a larger part of the whole," Lutts says
about his buy recommendation.
For more on Carlton Lutts' recommendation see "Stock of the
Month," December 10, 1998, The Cabot Market Letter. Growth
stock investor Carlton Lutts uses fundamental analysis and
looks for upward market trends and positive stock momentum
to identify tomorrow's superstars before their share prices
soar.
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