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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: VFD who wrote (16870)	7/26/2006 12:13:05 AM
From: Elroy	Respond to of 17183

At the very least you have not lost your sense of humor even though you may if you haven't yet, lose your shirt on emc. Honestly. Do you really believe anyone other than shorts can make money off of this dog?. Personally I bought a few EMC July calls prior to the disappointing announcement. They lost 80% of their value. Fortunately I also had bought a couple of July MOT calls when MOT was $19 or so, and they went up around 100%, so EMC has been a bad pick, but in the portfolio of things it's not killing me. As for the current outlook for the stock, I think it's in "who knows?" land. Until revenue growth stabilizes we aren't going to know whether EMC revenue is temporarily declining on a spending pause, or if EMC revenue is in the beginning of a long term deceleration like Dell is still going through. However, when EMC's valuation gets to IBM's valuation (~12x), I'd rather own EMC than IBM since its growth rate is ~2x IBM's growth rate. But that is a relative call, and not an absolute call. Also, there has to be a floor on EMC's valuation around 13x because IBM and HPQ would love to acquire the highly profitable leader in enterprise storage, and I'm sure they would pay at least 13x and call it accretive with the "synnergies". My large cap tech pick here is MOT, growing revenues above 15% per year and trading at ~11x ex-cash, actively repurchasing its shares, paying a dividend and in one of the few remaining growth markets in tech (cell phones) and with high exposure to China and India over the next 5-10 years. Yup, that sounds better than EMC!