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

To: dennis michael patterson who wrote (5878)	4/20/1999 9:51:00 PM
From: Jerryco	Read Replies (2) \| Respond to of 17183

Post from Yahoo thread: Here is a great message that Panit Homepluem Finance Home - Yahoo! Great message : Panit Homepluem by: eansor (44/M/Albuquerque, New Mexico) 13167 of 13201 Here is a great message that Panit Homepluem, a fixed income analyst, posted on the Motley Fool EMC board. Panit, forgive me for stealing this, for posting here, but I knew everyone on this board needed to see this also. At least I give you full credit. I am only the humble messenger. Enjoy! The following are Panit's comments in their entirety: Eat them up, YUM!!! The market momentum is going to do what's its gonna do. As a strong fundamentalist, I try to concentrate only on the business fundamentals of a company, regardless of the noise surrounding it. Well, what can I say? The quarter is yet another SOLID one…hmmm, let's see, it beats estimates by a penny once again. Sometimes we get lucky, and EMC crushes estimates by 2 pennies, but more often than not, we only get one. MO-MO players may irrationally overbuy my company and their expectations may run rampant, and you know, I don't care you if you guys come and go…but I know one thing: EMC is an INSANLEY GREAT company that will continue to WIN for many years to come. Short-term volatilities are only little blips in a long-term chart. The market pays up for dominance, consistency, and reliability. I think you should too. Quarter at a glance: Q1:99 Q1:98 Revenue $1.13B $828.4 MMGrowth Y/Y 36.0% 34.0%Operating Margin 53.2% 48.0%Tax Rate 25.0% 25.0%EPS $0.41 $0.28 PRODUCT MIX: Q1:99 Q1:98Enterprise Systems $ 861 $700Software $ 155 $ 66McData $ 39 $ 41Service $ 72 $ 22Total $1128 $829 Enterprise system sales Enterprise systems consists of mainframe and open systems products, made up 76% of total revenues, and increased 23% year over year. The company claimed that 50% of total revenues came from new products. An interesting fact to point out is that the company is seeing trends to larger systems, which means that it is a result of more customers consolidating centers. Take a look: Unit shipment by size Q1:99 Q1:98Small (up to 1.2 TB): 260 350Medium (up to 3.5 TB): 1040 1000Large (up to 9.3 TB): 680 400 Fibre Channel represented around 27% of enterprise system sales, which increased by a 100 basis points from the year before period. Software. WOW!!! EMC is the world's fastest growing software company! Software now makes up 14% of total revenues. Can I say WOW, again? WOWWW!!!! Revenues were up 135% Y/Y. Nearly 65% of storage systems were shipped with EMC's software, up from 60% at the end of last year. Service Service represented 6% of revenues. From a small base, of course, revenues rose 227% Y/Y. Mind-blowing… International woes…. Int'l sales represented 36% of total sales. Asian sales were down 12 % Y/Y. Ouch. But, domestic sales offset the woes and were strong as usual, up around 50% Y/Y. The company believes that int'l revenues will RAMP from here, and cited its recent investments in beefing up its sales and marketing efforts. Can anyone say revenue UPside? BALANCE SHEET STUFF Where's the flow-shmow ratio? I ain't even gonna do it … Keep in mind that EMC is in a period of product transition and introduction. - Cash was slightly down to $1.5 B, from $1.6 B in the year ago period. - A/R DSO came down 3 days to 78. - Inventory rose to $527 M from $426 M - Inventory as % of rev decreased to 47%, from 51%. - Inventory turns dropped slightly to 4.1 from 4.2. The Beautiful Margins: Gross Margins rose 500 basis points to 53.2% Marvelous!!! Profit Margins rose 200 basis points to 19.6% Marvelous!! With continued strong guidance for 1999, hyper growth of data storage requirements, strong business position, and excellent management, investors should be buying this stock by the BOATLOADS!!!!!!! Please think for yourself, but if you DON'T get it, you need some serious help. [I could refer you to some doctors if you really don't understand. You poor thing.] Buy strong companies when they get knocked down by surrounding noise…let me say this again - the quarter was solid, the fundamentals are STRONG, and the outlook is PEACHY. BUY EMC!!!!!! -------------------------------------------------------------------------------- Posted: 04/20/99, 5:58PM EDT as a reply to: Msg 13167 by eansor