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Pastimes : ASK Vendit Off Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Boplicity who wrote (12096)	5/4/2000 9:58:00 AM
From: Guardian	Read Replies (1) \| Respond to of 19374

Smartportfolio in same issue also highlighted EMC: INTERNET STOCK FOCUS: ENTERPRISE HARDWARE SECTOR EMC Corporation (NYSE:EMC) --> Company Background With the advent of the Internet, corporate entities increasingly are relying on computers to conduct their full range of business affairs. This heavy dependence on computers and information technology has made the effective management, sharing, protection and availability of critical information a top priority for companies. EMC Corporation (NYSE:EMC) has stepped up to the plate and hit a home run addressing this market, as the company designs and manufactures a broad range of hardware and software products designed to efficiently store, manage, protect and share electronic information. EMC's products and services enable organizations to create an electronic information infrastructure ?- EMC calls this the "E-Infostructure" ?- which is comprised of enterprise storage systems, networks, software and services. While EMC develops significant software technologies and provides extensive customer services to entities that purchase its products, the company's reputation has been built upon its preeminence in enterprise hardware development -- hardware design and production of products for the open systems, mainframe and network-attached information storage and retrieval systems. A host of brokerage firm analysts contend that EMC is the leading open-systems vendor of enterprise-class hardware storage products, and the company continues to gain significant market share as a result of its stellar reputation in this area. Why has EMC's storage hardware become the industry standard? A close look at the company's Symmetrix product line sheds significant light on the answer to this question. First, as with all of EMC's product lines, the Symmetrix hardware is delivered to customers with a suite of software applications that power the sharing, protection and administration of enterprise data. Second, the hardware is easily adaptable to nearly all environments, including UNIX, mainframe and Windows NT. Moreover, in order to provide the greatest connectivity flexibility, the Symmetrix products are able to use all major interconnection protocols. Finally, EMC's hardware products can be paired with a tremendous range of servers, including those manufactured by Hewlett-Packard, Silicon Graphics, NCR, Siemens and Unisys. Why is this point critical? Because unlike competitors who manufacture and sell servers, EMC concentrates only on storage. Thus, the company strategically eliminates an aspect of competitive friction that could rule out attachment of storage systems to competing servers ?- a classic strategic move on the part of EMC. EMC's blue chip customer base is comprised of a large number of Fortune 500 companies. In fact, roughly 72% of the Fortune 500 are EMC customers and the company's hardware is used at 90 of the Fortune 100 companies. It is important to note that this high level of "large cap" penetration is crucial to EMC as the future market opportunities for enterprise storage growth likely will be driven by such bellwether clients. --> Business Analysis EMC's stock price has been on a steady upward climb for the past several years, and the stock has risen approximately 28% since the first of the year. Shares of EMC withstood the recent technology stock storm that resulted in steep declines in shares of scores of Internet and tech companies. EMC, the #1 maker of computer disk memory hardware, declared a 2-for-1 stock split on Wednesday, with a pay date of June 2. The split is applicable to shareholders of record as of May 19 and the split-adjusted shares will begin trading on June 5. This marks EMC's sixth stock split since 1992. The most recent split occurred in May 1999. EMC's stock continues to sell at a premium multiple and currently is trading near its all-time high of 145 7/16. The stock closed down 2 (-1.44%) to 137 on Wednesday, representing a market cap of approximately $142.6 billion. The recent release by EMC of its quarterly earnings results illustrates the continued financial success that the company enjoys. On April 28, 2000, the company reported first quarter earnings of 30 cents per share, which exceeded Wall Street consensus estimates of 29 cents. EMC's growth rate during the quarter was approximately 23% and this growth came from all geographical regions in which the company is located. EMC's North American revenues came in about 35% higher year over year, while the company's Latin American revenues were up approximately 116%. --> Smart!Analysis The SmartPortfolio.com team is bullish about the prospects for EMC going forward. The company's management successfully has executed EMC's business plan and continues to be at the forefront of creativity and efficiency. While companies such as Hewlett- Packard, IBM, Sun Microsystems and Veritas all cater to some of the storage management needs of customers, only EMC has the winning combination of top-shelf hardware, state-of-the-art software and satisfactory customer support. It is important to note that EMC is positioned strategically so that the company would not be affected too adversely if Internet companies were to either receive reduced funding or scale back costs amid the current uncertain market conditions. Specifically, only about 12% of EMC's revenues are derived from dot-com entities. Not only are its clients' industries diverse, which minimizes the risk that a downturn in one market segment would hurt EMC's financial results, but the company also has made key strategic announcements during its most recent quarter. Topping recent news was EMC's disclosure of its partnership with Cisco Systems and Oracle to launch the ECOstructure, which is an alliance under which the companies will design blueprints for Internet infrastructure. While EMC's key metrics remain solid, the company's success going forward likely will be bolstered by the underlying strength of the enterprise storage market. Fueled by soaring Internet use, more advanced technology and new applications that give rise to mounds of data, the market in which EMC competes is expected to catapult to unprecedented heights. EMC is well positioned to compete successfully in this market and to remain a leading enterprise storage powerhouse. As such, the SmartPortfolio.com team urges investors to seriously consider including EMC as part of your investment portfolio.