Stocks in Focus May 20 1999 9:55AM CST
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EMC Corporation - Storage! Scotty...I need more storage!!!
by Paul Anthony Thomas, Contributing Editor
EMC Corporation (EMC), with 9,400 employees worldwide and over $3.9 billion in annual revenue in
1998, is the world's leading supplier of intelligent enterprise storage and retrieval technology,
designing systems for open system, mainframe, and midrange environments. EMC's Enterprise
Storage products allow organizations to leverage their growing volumes of information into
profitability and competitive advantage. A global organization, EMC is represented by more than
100 offices worldwide. The company manufactures its products in Massachusetts and Ireland, has
R&D facilities in Massachusetts, Israel and France, and Customer Support Centers in
Massachusetts and Ireland. A key portion of their business is financing their product to the end
customer through their financial subsidiary.
5 Year Chart of EMC
A look at the 5 year chart of EMC shows that this stock has moved from a split adjusted $10.00
share in 1995 to a trading range of $100/share in May, 1999 (1000% in 5 years). This extreme
growth is due to the following:
Aggressive, focused management,
The market leader in their niche,
For the 3 months ended 3/31/99, revenues rose 36% to $1.13B,
Net income rose 51% to $220.7M,
Institutions hold 80+% of the outstanding stock,
Revenue Growth over the past 3 years has been 27% annually,
The company's reinvestment rate is 100%,
Their current ratio is extremely high and they have $1.5 Billion in the bank,
If you believe that computing power is in its infancy and that leaders in the computer industry will
thrive in the future, you should seriously consider EMC for the conservative portion of their portfolio
based on the fact that they have a stable base business unit and they are expanding into new
sectors. Play this stock for the long run, hold it in your portfolio, purchase more shares when the
stock drops (EMC is presenting buying opportunity now coming down off its high in the $130's) and
write covered calls on your holdings. |
