A Decent Buy After A Pullback

EMC Corporation was founded in 1979 by two entrepreneurs, Richard Egan and Roger Marino. As a small startup, innovating 64-kilobyte memory boards was the first initiative. Later, the entrepreneurs moved on to developing computer data storage types and networked storage platforms. In the early 1990s, EMC became a multi-billion dollar company. Headquartered in Hopkinton, Massachusetts, EMC provides products pursuant to this agreement several segments ranging from information security to enterprise content management and cloud computing services. Afterwards the acquisition of VMWare in 2004, EMC became one of the top players in cloud computing services. The company employs more than 53,000 employees worldwide. EMC consistently scores among the best places to work. In March 2010's Fortune List of the "World's Most Admired Computer Companies", EMC settled as the third in the list. The company is a really global tech giant with worldwide operations. In 2011, EMC announced record revenue of $20.01 billion, $5.7 billion operating cash flow and $4.4 billion free cash flow.

The largest provider of data storage platforms

As one of the largest provider of data storage platforms, EMC is a direct competitor with several giants in this field. IBM, NetApp, and Hewlett Packard are among other tech titans in the data storage business. I think the macroeconomic outlook is strongly positive for these companies. Given the increasing need for data storage systems, the demand for these products will keep rising. The rising demand will in turn boost the profits of these companies. Hewlett Packard is my favorite among this group, since it has the lowest trailing and forward P/E ratios.

Technology stocks are pretty cheap in general, nevertheless EMC is trading at a fair value. At the current prices, EMC is nearly at the top of its 52-week trading range. In spite of collapsing to $20 from $28 in the middle of the last year, EMC showed a magnificent performance in this year. The stock is up by nearly 34% since January. Its fundamentals look strong enough to encourage long-term investors. Based on my FED+ valuation, EMC has up to 23% upside potential. I rate EMC as a buy. All in all, considering the recent upward movement of the stock, it might be a good idea to wait for a pull back.