No. of Recommendations: 6
EMC -- RM Ranker Analysis

Note:  The companies used as "competitors" are not the equals of EMC.
IBM and SUNW are much larger companies, both involved in diverse
markets. NTAP is much smaller than EMC, and is only involved in one 
area of storage, NAS.  Thus, the comparisons are not quite apples-to-apples, 
and the numbers should be viewed accordingly.

                                The Motley Fool's Rule Maker Ranker
                                  Version 3 -- Updated June 2000
                               
                                                                               
                          Company Being Evaluated                 Competitor #1   Competitor #2    Competitor #3

                                EMC Corp.                             SUNW            NTAP             IBM
                   Current Period  Year-ago Period  Yr-over-Yr   Current Period  Current Period   Current Period
                  6mo end 6/30/00  6mo end 6/30/00    Growth      9mo end 3/28    3mo end 7/28     6 mo end 6/30
Income Statement
  Sales                   3,969          3,131        26.8%          10,704            231            40,999
  Cost of Goods S         1,693          1,577        7.4%            5,145             89            26,045
  Net Income                761            508        49.8%           1,134              5             3,460
  Shares Outstand     2,240,805      2,214,676        1.2%

Balance Sheet
  Cash & Equivale         2,339          1,347        73.6%           3,133            437             3,261
  Current Assets          5,144          3,133        64.2%           7,344            630            39,437
  Short-term Debt            11              9        22.2%               2              0            12,315
  Current Liabili         1,607            814        97.4%           3,844            148            33,862
  Long-term Debt             15            506       -97.0%           2,134              0            16,859

Cash Flow Statement
  Operating Cash          1,017            628        61.9%           2,002             64             2,485
  Capital Expendi          (439)          (282)        N/A             (647)           (21)           (1,833)
                                                                         1              1                 1
Margins & Ratios . . .                                                                                          Competitors' Average
  Gross Margins            57.3%          49.6%        7.7             51.9%          61.5%             36.5%         50.0%
  Net Margins              19.2%          16.2%        2.9             10.6%           2.2%              8.4%          7.1%
  Cash-to-Debt             89.96           2.62      3339.5%            1.47        8092.59              0.11          0.22
  Net Cash                2313.0          832.0      178.0%            997.0          436.9          -25913.0       -8159.7
  Fool Flow Ratio           1.76           2.22      -20.8%             1.10           1.30              1.68          1.36
  Cash King Margin         36.7%          29.1%        7.6              24.7%          36.8%             10.5%        24.0%


                  

Ranking Rule Makers

1) Brand          Points (0-1)           3) Financial Direction Points (0-3)
Familiarity                    1         Sales Growth                   3
Openness                       1         Gross Margins                  3
Optimism                       1         Net Margins                    3
Legitimacy                     1         Shares Outstandin              2
Inevitability                  1         Cash-to-Debt                   2
Solitariness                   1         Fool Flow Ratio                3
Humor                          1         Expansion Potenti              2
  Subtotal                     7           Subtotal                    18

2) Financial Location Points (0-2)       4) Monopoly Status Points (0-4)
Mass Market Habit              1         Gross Margins                  4
Gross Margins                  1         Net Margins                    4
Net Margins                    2         Net Cash                       4
Cash-to-Debt                   2         Fool Flow Ratio                0
Fool Flow Ratio                0         Convenience                    4
Your Interest                  1           Subtotal                    16
  Subtotal                     7
                                         5) Your  Enjoyment             1

                   Total Score   49  Second Tier



Notes:

1. SUNW's long-term debt is reported as "Long-Term Debt and Other
Obligations", no further breakdown given.  Notes indicate that $1.5
billion of debt securities were issued in 8/99.

2. NTAP carries a small amount of long-term debt: $54,000.  This
number rounded out to zero when converted to millions and processed
by the Ranker.

3.  EMC's total score should be 1 point higher (i.e. 50).  See
Comment 3, below, for explanation.

Historical Metrics for EMC:

                 6mo end   3mo end   
                 6/30/00   3/30/00   1999   1998

Sales Growth      26.8%      23%      24%    21%
Gross Margin      57.3%      57%      51%    45%
Net Profit Mgn    19.2%      18%      15%    12%
Cash/Debt Ratio   89.96      8.8     2.62   2.33
Foolish Flow R.    1.76      1.7      1.8   2.02
Cash King Margin  36.7%      19%      11%     8% 

Comments:

1. Sales Growth.  Sales growth is good (26.8%) and continues to
increase.  I also calculated sales growth by segment within EMC--note
storage product sales growth 38%, and within storage products, software
sales growth of 86%.  This suggests continuing strong demand for storage
products.  

EMC--Revenue Growth Rates by Segment

                                             Storage Segments Revenue as
                            Rev. Growth    as a % of Total Storage Revenue
                              6mo end           6mo end     6mo end 
                              6/30/00           6/30/00     6/30/99
                               -----             ------     -------
Storage Products
  Enterprise storage hdware     34%               73%         75%
  Enterprise storage sftware    86%               18%         14%
  Enterprise switching prod.   -10%                2%          3%
  Clariion storage products     13%                7%          8%
     Total Storage              38%

Services
  Storage Related               58%
  Server Related               -17%
    Total Services              17%



I computed sales growth for EMC's competitors, but I'm not sure how
meaningful those numbers are, given the disparity of the markets
these companies serve.

Sales Growth for Competitors (based on latest 10Q):
IBM: -3%
SUNW: 29%
NTAP: 124%  

NTAP's growth is an impressive 124% for the first three months of
its current fiscal year.  Unfortunately, EMC doesn't break down its
revenues in such a way that its growth could be more accurately compared
to NTAP.

2. Gross Margins.  EMC's gross margins are good (57.3%) and improving--
up 7.7% over last year. Some of the improvement might be due to EMC's
growing software sales. Software is a good profit leverage, since
production and inventory costs are extremely minimal. As storage
systems become larger and more complex, EMC's software sales should
continue to grow, and gross margin should continue to improve. 
 
EMC's gross margins are good compared to its larger competitors. EMC's
gross margin on its storage products is 62%, which is almost identical
to NTAP's 61.5 gross margin.

EMC's gross margins by segment:
Storage Products:  62%
Server Products: 38%
Services: 30%

3. Net Margins.  Net margins are also improving, up 2.9% over same
period last year, and are much better than those of EMC's competitors.  

NOTE: TMF recently changed the RM scoring criteria for Net Margins;
see http://www.fool.com/portfolios/rulemaker/2000/rulemaker000913.htm.
Net Margins of 13% or higher score 3 points in Section 2 of the Ranker.
Thus, EMC's Net Margin score should have been 3 instead of 2, and its
total score should be 50, not 49, which moves it into the first tier
of RM companies.

4. Cash-to-Debt Ratio.  C/D ratio has improved dramatically.  This is
due to the retirement, earlier this year, of a large long-term debt.
Cash position continues to improve, and the company continues to grow
without incurring substantial new debt.

5. Foolish Flow Ratio.  This has always been the bane of EMC's RM
existence.  This quarter, the flowie continues its downward trend.
Large receivables have been blamed for the high flowie, indicating
poor credit management. This may improve as software sales grow. NTAP
has a lower flowie, possibly because it's selling a less-expensive
type of storage system which requires less financing?

6. Cash King Margin.  CKM shows good improvement, up 7.6% over last
year.  EMC's margin is better than its larger competitors and almost
identical to that of NTAP.

Overall, EMC's RM metrics continue to improve, suggesting that it is
a well-managed company which remains competitive in its industry.  



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