Should You Jump On the EMC Bandwagon?

January 07, 2013

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for and balance sheet for EMC are strong. As you can see below, that’s common for the industry.

	Debt-To-Equity	Cash	Long-Term Debt
EMC	0.07	$5.47 Billion	$1.71 Billion
NTAP	0.28	$5.57 Billion	$1.23 Billion
STX	0.81	$2.47 Billion	$2.87 Billion

T = Technicals on the Stock Chart Are Mixed

EMC has outperformed NetApp (NASDAQ:NTAP) over the past three years, but Seagate Technology (NASDAQ:STX) stole the show. You could also say Seagate Technology added salt to the wound with its dividend payments. Seagate Technology currently yields 4.80 percent.

	1 Month	Year-To-Date	1 Year	3 Year
EMC	-3.38%	-3.83%	10.54%	36.23%
NTAP	3.52%	1.58%	-3.52%	2.19%
STX	11.70%	3.39%	81.05%	86.53%

At $24.33, EMC is currently trading below all its averages.

50-Day SMA	24.77
100-Day SMA	25.77
200-Day SMA	26.03

E = Earnings Have Been Steady

EMC has been steadily improving earnings since 2009. It’s also important to note that EPS for 2011 exceeded EPS for 2007, which is difficult to find in any industry.

	2007	2008	2009	2010	2011
Revenue ($)in billions	13.23	14.88	14.03	17.02	20.01
Diluted EPS ($)	0.74	0.61	0.53	0.88	1.10

When we look at last quarter on a YoY basis, we see an increase in revenue and earnings.

	9/2011	12/2012	3/2012	6/2012	192012
Revenue ($)in billions	4.98	5.57	5.09	5.31	5.28
Diluted EPS ($)	0.27	0.38	0.27	0.29	0.28

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