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Company name EMC Corporation
Stock ticker EMC
Live stock price [stckqut]EMC[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $25.15
Target stock price (averages with growth) $33.92
Target stock price (averages with no growth) $31.55
Target stock price (manual assumptions) $26.58

The following company description is from Google Finance: http://www.google.com/finance?q=emc

EMC Corporation (EMC), and its subsidiaries develop, deliver and support the Information Technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. The Company manages its business in two broad categories: EMC Information Infrastructure and VMware Virtual Infrastructure. EMC Information Infrastructure provides a foundation for organizations to store, manage, protect, analyze and secure ever-increasing quantities of information, improve business agility, lower cost of ownership and enhance their competitive advantage within traditional data centers, virtual data centers and cloud-based IT infrastructures. Its EMC Information Infrastructure business consists of three segments: Information Storage, Information Intelligence and RSA Information Security. In July 2014, EMC acquired TwinStrata Inc, a Natick-based developer of cloud-integrated storage solutions.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in EMC Corporation as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of EMC Corporation calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
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In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $26.95
  • Growth: 0.101
  • Current EPS (TTM): $1.26
  • P/E: 21
  • Future EPS Calc: $2.03
  • Future Stock Price Calc: $42.8
  • Target stock price: $26.58

I hope that this makes you a better investor. [/s2If]

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ID-10013889On my weekly posting covering the current best stocks according to my indicator analysis, I frequently discuss the 52-week high. A reader recently asked me why I consistently mentioned this metric.

I have discussed earlier that being a successful and confident investor requires that you be able to interpret a stock chart. You don’t need to be a technical investor, but you need to know some of the basics.

One of those basics is that you need to know resistance levels. Resistance levels and support levels are simply the changes in direction that the stock has taken lately. When a stock starts going up, pauses, and then starts to go back down then it has set an upper-resistance level. Similarly, when the stock goes down, pauses, and starts going back up again, then it has set a support level. It is the nature of stock investors to fear these levels as stocks approach them again. You will find a natural hesitancy to go above the resistance level or below the support level in the following weeks and months.

The 52-week high is a natural resistance level that is quite significant and often scares investors. When the stock does go above a 52-week high then investors are unsure where it can go. They often become hesitant to continue to invest. You may also find that the stock will grow rapidly as there are no immediate resistance levels in the near future.

The strength of the 52-week high resistance is even stronger if it is relatively close to today’s date. If the 52-week high was 51 weeks away then that the resistance is not nearly as strong as if it is only two weeks away.

It is important to remember that some investors purchased the stock at that 52-week high. Therefore, if there are no other detracting events or news, the stock is worth that 52-week price. After the stock has pulled back from its 52-week high and paused at a lower range for some amount of time, there is a natural attraction for the stock to return to that peak and or exceed it.

For this reason, my weekly indicator thoughts often reference the amount of time since the 52-week high. I also mention the stocks eagerness or hesitancy to reach the peak number. These time-frames and actions are an important tool to understand the emotion of the investor community.

My weekly investor thoughts are available for everybody to read on this site. However, in order to see all of the details of the comments you will have to own my book, The Confident Investor.  You can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in e-book formats for Nook, Kindle, and iPad.

Image courtesy of Idea go / FreeDigitalPhotos.net