As the CEO of EMC sees a tech spending bottom, the stock is dropping today by 6%.
Market Edge has the following comment regarding EMC”
Moving Average Convergence/Divergence (MACD) indicates a Bullish Trend.
Chart pattern indicates a Weak Upward Trend.
Relative Strength is Bullish.
Up/Down volume pattern indicates that the stock is under Accumulation.
The 50 day Moving Average is rising which is Bullish.
The 200 day Moving Average is falling which is Bearish.
Look for Support at 12.55
S&P rates the stock 2 stars, or SELL. From the S&P report: Our risk assessment reflects our view that EMC is a market leader, generates consistent free cash flow, and has a strong balance sheet. However, we see the storage segment as somewhat cyclical, highly competitive, and often typified by pricing pressure.
I disagree, EMC is in a strong position with a projected $10billion in cash and investments and will generate nearly $1 Billion in free cash flow by the end of 2009. Additionally, the S%P Fair Value Calculation of EMC is $18.30 per share. (Report date April 18, 2009)
Regarding VMW IPO: The VMW IPO has improved the overall value of EMC by using proceeds from the VMW IPO for EMC share repurchases. As of March 2008, the company had $7.9 billion in cash and investments received following the 15% VMW IPO. EMC maintains 85% of VMW. EMC and VMW are synergistic business partners and I expect EMC to maintain the balance of the VMW shares.
I will continue to hold my Full EMC position at this time.