While we’re all bitching and moaning about do-nothing old tech stocks like Microsoft and Cisco, EMC has very quietly been running like an escaped convict trying to stop his baby mama’s wedding before its too late. Run, Jimmy – I just know she still loves you!
What was I talking about? Oh yeah, so EMC has been an absolute wildebeest over the last year returning a jaw-dropping 52%, almost a double over the tech-heavy Nasdaq (as seen below):
Why, while its old tech brethren are sleeping so soundly, has EMC been such a great performer? They have something the others don’t – secular growth.
EMC plays in the data storage sandbox almost exclusively and the need to be able to store (and access) data in a scalable way has never been greater. It also shows no sign of slowing down ever. We’re not exactly on a trajectory of creating less digital stuff now, are we?
I’m not in the name personally, as far as storage names my only pure-play at the moment is Network Appliance, but the story there is pretty much the same. When I looked at the numbers between the two companies, however, I was amazed to find out that EMC is outspending its smaller rival NTAP in R&D in a meaningful way, $2 billion annually versus $600 million.
Equally amazing is that EMC has been smart enough to hang onto their single best asset, an 80% stake in virtualization monster VMWare (VMW). They bought VMW in 2003 for about $600 million and they have since seen a 65x return on it. Ridiculous! I’m sure over the years there have been some tempting opportunities to have divested of it but the company hung in there knowing that the best was yet to come.
I think the message is that storage, unlike desktop software (as in the case of Microsoft) or physical routers and switches (as in the case of Cisco) is still a growth business. EMC has done a lot right, don’t get me wrong, but what really separates them from their fellow 90’s era stalwarts is the business they are in. In the tech sector, end demand makes the stock, not the other way around. This is something the value guys need to keep in mind when hunting for bargains in the large cap Nasdaq names.
(yes, I know this graphic is gangsta and if anyone from EMC corporate wants to make t-shirts, all I ask is for a size XL mailed my way)
[…]although websites we backlink to beneath are considerably not related to ours, we feel they are actually really worth a go by way of, so possess a look[…]
[…]we prefer to honor several other web web pages on the internet, even when they aren’t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]
Enjoy high quality gourmet Kona Peaberry Coffee and pure Kona Coffee in whole beans, grinds, filter packs and 100% Kona Coffee single serve K-cups all fresh from the Kona estate store.
I’m a New York City-based financial advisor at Ritholtz Wealth Management LLC. I help people invest and manage portfolios for them. For disclosure information please see here.
Subscribe & Reform
Get a Full Investor Curriculum: Join The Book List
Every month you'll receive 3-4 book suggestions--chosen by hand from more than 1,000 books. You'll also receive an extensive curriculum (books, articles, papers, videos) in PDF form right away.
desensitizing anal lube
[…]check beneath, are some completely unrelated internet websites to ours, however, they may be most trustworthy sources that we use[…]
Title
[…]Every after in a although we pick out blogs that we read. Listed beneath are the most up-to-date sites that we pick out […]
pump penis
[…]one of our guests lately advised the following website[…]
vigra
[…]that will be the end of this post. Here you will discover some sites that we believe youll appreciate, just click the links over[…]
Xvideos
[…]just beneath, are various absolutely not related web pages to ours, nevertheless, they may be certainly worth going over[…]
Title
[…]although websites we backlink to beneath are considerably not related to ours, we feel they are actually really worth a go by way of, so possess a look[…]
Title
[…]although websites we backlink to below are considerably not associated to ours, we really feel they’re actually worth a go via, so have a look[…]
Title
[…]we prefer to honor several other web web pages on the internet, even when they aren’t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]
Title
[…]Sites of interest we’ve a link to[…]
upholstery cleaning
[…]below youll locate the link to some websites that we think it is best to visit[…]
Title
[…]usually posts some really exciting stuff like this. If you’re new to this site[…]
rabbit super vibe
[…]Here is a good Weblog You might Locate Interesting that we Encourage You[…]
the best of pure kona coffee beans
Enjoy high quality gourmet Kona Peaberry Coffee and pure Kona Coffee in whole beans, grinds, filter packs and 100% Kona Coffee single serve K-cups all fresh from the Kona estate store.
Bestecktaschen Modell Pochetto
[…]check beneath, are some completely unrelated internet websites to ours, even so, they may be most trustworthy sources that we use[…]
legitimate work from home job no startup fee
[…]Here is a great Weblog You may Uncover Exciting that we Encourage You[…]