EMC is a good company with industry-leading technology and will continue to be a top performer. Let's take a look at its new family of Xtrem Flash products as an example of how it continues to lead the industry and then I will give you my opinion on how one should invest in the company.
EMC's Xtrem Family of Products
EMC's "Xtrem" is a family of flash optimized server and storage products. And it recently introduced a new line in this family of PCIe-based Flash cards that dramatically accelerate application performance. This new family can be deployed either by direct attached storage (DAS) that sits within the server to deliver high performance or in combination with another EMC product in order to "turbocharge" network storage array performance and maintain the high level of protection needed.
As a quick summary of what these flashcards are capable of:
- Performance- delivery is measured in 1.1 3 million IOPS in a standard form factor and no industry has been able to match this. The XtremSF has a "throughput" delivery twice that of others on the market.
- Flexibility- when deployed with XtremSW cache, the devices can be leveraged as a caching device that accelerates performance but protecting applications that are being used, including from such companies as Oracle (ORCL) and Microsoft (MSFT).
- Efficiency- the flash devices also deliver the lowest (TCO) in the industry, 58% better than other offerings in the industry.
EMC has a long term "server flash strategy" intended to deliver a server side storage product which featured software running on SLC- based flash devices. The software turns the server flash (DAS) into a cache which enhances the performance of a variety of applications.
This "multiple performance enhancement" is needed in today's competitive world. The old way of thinking was a single point flash solution but this won't work anymore as workloads are multi-phasic and the flashpoint needs to be able handle the work. It's got to be a "portfolio approach" to using flash. The server, the array (all Flash arrays) need to be working together with software designed to do this. EMC is just the company to do this.
Analysts Still Like the Company
I believe analysts like this company because the numbers are performing well. As an example, net income growth exceeded the S&P 500 and the industry as it increased by 4.5% compared to the same quarter a year ago. And revenue has grown by 8.2% which increased earnings per share which has been the pattern over the last couple years. Trying to put some caution into the company so I don't look like I'm just favoring all the good points; even though revenue has grown it underperformed the industry average by 18% and the net profit margin of 14.4% also trails the industry average. And even though the debt to equity ratio is higher than the industry average, it is still very low, coming in at 0.07 so I don't believe this is anything to worry about. Analysts still like the company.
I know the stock makes some extreme moves up and down as I look at the charts we have huge valleys and huge peaks. But it looks like we might finally have a double bottom here where the stock could have reached a point it will start moving up. Even though the company is presently trading at about 23, there was a large trade of July 19 put options sold recently which means there is a serious trader out there who believes the stock will stay above 19 through July. On an even more positive note, both the RSI indicator and the MACD indicator are showing a positive divergence. When I see this occurring in both indicators it shows me that the stock is gaining strength so it looks like it's ready to go back up again. I cannot tell you if this is a sustained run or if it's going to hit strong resistance at about the 25 level again.
EMC has been a consistent moving stock with extreme highs and lows figuratively speaking, with the swings have been about 10% on average. I believe the company is getting ready to move back up again but I can't say it's going to be a good long-term buy because of its past history of movement. But if one is interested in a growth stock for a period of time, now appears to be the time to buy and if it is consistent with its past performance, an investor should be able to eke out a 10% gain.