+ Watch EMC
on My Watchlist
EMC is a leading provider of network storage, backup software, and other information technologies.
see the preliminary "pitch" here:http://caps.fool.com/Blogs/ViewPost.aspx?bpid=202671
from that "pitch":------------------------------------Now the revenue numbers ($B) from 2002 to 2006 (years with no or very little revenue from VMW) from the 10-Ks:year rev. EMC, rev. VMware Virtual Infrastructure segment, rev. stub2002 ca. 5.438, 0, 5.438 the 2002 ("multi-year"-) low of EMC (close to EMC stub, no VMware before 2004, little if any "cash minus debt") was at $3.67 on October 4, 2002 2003 ca. 6.237, 0, 6.2372004 ca. 8.230, 218, 8.011 (VMware was acquired in January 2004)2005 ca. 9.664, 387, 9.2772006 ca. 11.155, 0.709, 10.4462007 ca. 13.230, 1.321, 11.9092008 ca. 14.876, 1.877, 12.999All I am trying to say is that you can get the EMC stub almost at around the price it had at the 2002 crash low, making about twice the revenue. And net loss per share (diluted) in 2002 was 0.05.It was around $0.50 (again:I would have to look into that. Just a wild guess, it was $0.64 including VMware ...) in 2008 and should about stay there in 2009.So again the take-away:Get the stub with revenue08 of $12.999 B vs. revenue02 of $5.438 B and EPS08 of +0.50 vs. EPS02 of -0.05 at close to the 2002 crash intraday-low price.(Of course there is no way to really buy the EMC stub. You can "short out" the VMware part, but not the ("cash minus debt"). okay maybe one way: Buy the company and sell VMware, but I doubt you would get it for the $11.59 per share it is currently trading at. oh well ... just buy EMC. VMW is not really overvalued, I think ...)------------------------------------In 2002 the 10-K shows as "cost and expenses" "Restructuring and other special charges" ca. $0.15 B. "Taking that out" you still end up with a loss before taxes and the EPS02 would have been below $+0.05, I guess ...
------------------------------------EMC CorporationOur second largest investment is our stake in EMC. We invested in EMC because of the highquality nature of the company’s two principal business lines – the Information Infrastructure andVirtual Infrastructure businesses – and our ability to acquire a position at a substantial discountto our estimate of fair value.Each of EMC’s Information Infrastructure’s three segments – Information Storage, ContentManagement and Archiving, and RSA Information Security – leads the market in which itcompetes. Because of the extremely high compound growth rate in data globally – estimated byindustry experts at 60+% per annum; (think saved YouTube videos and regulatory requirementsto preserve documents and data), we believe that demand for data storage over the long-term islargely insensitive to the economy. As a result, we expect that EMC’s dominant market positionin Information Infrastructure will continue to allow it to generate growing, and predictable freecash flow from new product sales, recurring maintenance and warranty revenues, and the sale ofconsumables. The company also benefits because of its substantial operating leverage fromeconomies of scale, large barriers to entry, and economies of scope, where the breadth of thecompany’s product offering is a significant competitive advantage.EMC’s customers are diverse by industry and geography and enjoy efficiencies fromconcentrating their infrastructure spending on a small number of market leading vendors such asEMC. Its customers are also highly risk averse, as data storage is a critically important functionfor regulatory and competitive reasons, and customers face significant costs if they switch to analternative vendor.Information Infrastructure enjoys the benefits of both the inherent operating leverage of thesoftware business with the high switching costs of the hardware business. Because EMC’sInformation Infrastructure hardware is built from the assembly of components manufactured bymultiple, highly competitive, third-party suppliers, EMC does not suffer the inventory risk,capital intensity, and supplier negotiating power of traditional hardware businesses.EMC’s off-balance sheet assets include a large base of satisfied customers that are receptive toadditional offerings from EMC, and a sales force that is considered by many to be the best in theinformation technology industry. Combined, these assets facilitate EMC’s expansion intoadjacent markets.The rapid adoption of virtualization and cloud computing led by EMC’s 84% owned, publiclytraded VMware subsidiary – we are rapidly moving to a world in which you will simply rentyour computing power and storage from third parties and you will no longer have that noisy,heat-generating, power-consuming box under your desk – increases the demand for EMC’sofferings, while improving EMC’s opportunity to differentiate its offerings and maintain itspricing.VMware is driving a transformation of the information technology industry, and in that processwe expect it will capture large profits over time. We believe that the VMware can ultimatelyenjoy a market position and economics similar to that enjoyed by Microsoft’s Windows x86server and desktop operating system.We attribute EMC’s substantial stock price appreciation in recent weeks to the market’srecognition of a recently completed strategic acquisition, better-than-expected second quarteroperating performance, and the continued business progress of VMware.We believe that EMC is undervalued on a sum-of-the-parts basis, and that the value of its twocore operating segments will continue to increase at an attractive rate.------------------------------------(from here: Pershing Square Q2 2009 Investor Letter -> http://dealbreaker.com/images/thumbs/Pershing%20Square%20Q2%202009%20Investor%20Letter.pdf)
Hi Port, Do you have any update on EMC? This stock hasnt done much in the last couple months. I remember you saying this was your largest holding. Is that still the case? Any thoughts on the future of this company?
yes, it is still my largest position.a thought on the future of this company. someone buys them for $35 per share or more in 2010. or someone buys VMW for $100 per share or more in 2010. or maybe not.
currently 4250 shares in my portfolio.
currently 2600 shares in my portfolio.
currently 2300 shares in my portfolio.
currently 1900 shares in my portfolio.
currently 1450 shares in my portfolio.
currently 1650 shares in my portfolio.
currently 1200 shares in my portfolio.
I no longer update my portfolio positions.
see this post.http://caps.fool.com/Blogs/emc/533193.
There are currently 97000 shares in my "fund" with break-even of around 21.68 USD. http://caps.fool.com/Blogs/fund-trades/678775.
now 94000 shares in the fund with break-even of around 21.66 USD.http://caps.fool.com/Blogs/fund-trades/687712.http://twitter.com/portefeuillefun.
now 8300 shares in the fund with break-even of around -19.42 USD.http://caps.fool.com/Blogs/fund-trades/716433.
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