To: Jacob Snyder who wrote (12385 ) 3/8/2001 11:36:53 AM From: Crystal ball Read Replies (2) | Respond to Selling EMC to buy NTAP. Convergence under OSN for NAS and SAN is underway for many reasons, and NTAP has the edge here over EMC. Also, EMC to make a sale, is selling a very expensive system, or entering into long and admittedly higher profit margin service agreements: customers want a leaner and meaner supplier, and the price points here favor NTAP at the moment. What I do, is treat NTAP and EMC as if they will merge, and buy and sell between the better of them at any given moment, so far this has worked very nicely. Its like an arbitrage play, without the merger....although there has always been talk of mergers and consolidations in this industry. Storage right now is the only good tech sector left, since CSCO failed to warn on disappointing earnings for the first time in years, and it would appear that neither board of directors of any of these companies want to sell. It may be that these companies, NTAP and EMC, particularly NTAP may start to cherry pick acquisition targets of other storage related companies, like some of their customers, BRCD comes to mind as a target. Anyway, right now NTAP is the most oversold, and with an upside all the way to $150 or so, rather than EMC being at its high recently, NTAP could well double, triple, and then double and triple again within a year if the markets recover and there is no recession as even yesterday Abby Joseph Cohen predicts, and the FED continues to lower interest rates. On a recovery storage will grow even faster than now, and taking the PROJECTED GROWTH RATE NOW ALREADY EXCEEDING THE PROJECTED PRICE TO EARNINGS RATIO, The price is currently OVERSOLD even at these P/Es. So I buy NTAP until it triples, and then will sell and buy EMC.
