Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
About two months ago, I put EMC through the 9 criteria of a Cash-King/Rule-Maker. The only criterion EMC didn't meet was the one for Flow Ratio (I calculated it at 2.3, and ideally it should be below 1.25). I decided it was probably high due to the higher price of their products, which would make the value of their inventory a little pricey. Its showing on all the other criteria was passing to outstanding (Gross Margin: 52.3%, Debt Multiple: 2.3, Net Margin: 20.1%!). Their latest fiscal report (ending Dec. 1998) checks out pretty close to the same.

Add to this that:
1) EMC is the breakaway leader in enterprise storage systems (over $51 billion vs. Seagate in second place at $9.8 billion).

2) EMC has a solution to help companies through the Y2K transition period (http://www.emc.com/front_page/feature/feature.htm).

3) Enterprise storage is expected to go from a $4 billion industry to $10 billion in 2001.

4) EMC just posted their best quarter of sales ever (a record $1.19 billion, 36% higher than the fourth quarter of 1997).

Happily, I decided to buy stock in EMC about a month ago. I think the Rule-Maker portfolio would do well to do the same.

MGS
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.