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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (4522)	8/2/1999 12:06:00 PM
From: HDC	Read Replies (2) \| Respond to of 54805

DownSouth, I understand your point about the never ending search for higher margin business. EMC is faced with a true dilemma. EMC President & CEO Michael Ruettgers stated in a recent interview that the market Emc addresses was $12 billion in 1998 and will reach $35 billion in 2001. Most of those dollars will come in the large storage boxes and the necessary software. Does EMC pursue the big dollar SAN storage (30+% margin) and necessary software (70%+ margin) in their race to stay ahead of IBM, HWP, & Sun? Or, Do they go after the NAS storage market which has good margins (60%) and great growth potential but is working from a much smaller base of around $540 million in 1998? I think EMC will make some type of effort at the NAS market but their main focus will be the large SAN market and its required software market where the big dollars are. Can you imagine the bad press that EMC would receive if IBM regained the storage lead from them? The most recent research report (6/10/1999) from ML states that NTAP's mgmt estimates that they see EMC on 10% of the filer deals & win half of them. They also claim their win rate is 80% on non-EMC competitors. I think a "Tornado Warning" was issued at the end of last quarter for NTAP when their revenues exceeded $90 million against analysts' estimates of $85 million. That is, if my understanding of tornadoes from reading "The Gorilla Game" is accurate. Their growth rate is accelerating again to 80+% after "only" growing at 70+% for the previous 5 quarters. I may be wrong or I may be even early. Time will tell. Best, Duncan

To: DownSouth who wrote (4522)	8/2/1999 12:23:00 PM
From: Sunny	Read Replies (3) \| Respond to of 54805

The most recent fundamentals & ratio from WSRN show net margins to be 12.3%. However, the top line and profit growth is impressive yr/yr 80% & 70%. Perhaps you can help me understand the exuberance that would support a PE ratio of 118 when projected earnings/shr will grow only 44%. Sunny