EMC Corporation (EMC), VMware, Inc. (VMW) & NetApp Inc. (NTAP): Data Is Exploding, Buy Cloud Storage Providers

VMware, Inc. (NYSE:VMW) is experiencing faster growth than EMC Corporation (NYSE:EMC), but the stock is down. By down, I mean the share priced crashed in a crazy short-term overreaction. VMware’s management reiterated that they expect impressive growth for three years beginning with 2014, which meshes with my belief that VMware is an investment in the future of the information age. I find EMC interesting, and I think $22 would be a fantastic place to get it so writing puts would be the entry. I like VMware at its current level.

Storage wars

NetApp Inc. (NASDAQ:NTAP) is in the same field as EMC. It provides network, cloud, and other storage solutions for companies in addition to other services. The hardware is still the prime mover for the company, though service could provide a valuable new revenue stream. There was not much information on this in the last earnings call.

The most interesting bit of news is that they expect some dilution stemming from warrants and convertible notes. The company has enough cash and free cash flow and expects to repurchase shares to undo the dilution. The company has $6.7 billion in cash and $2.2 billion in long-term debt. The balance sheet looks great, but I think revenue growth is what has kept the stock flat for the last year.

Conclusion

NetApp Inc. (NASDAQ:NTAP) is making money, but its revenue growth has slowed a bit, and EMC Corporation (NYSE:EMC) seems to be doing better in that regard. I also think that EMC is worth much more than it appears, because a lot of its current value is made up of its stake in VMware, Inc. (NYSE:VMW), but it is a valuable company in its own right. With EMC on its way down, I think there is a better profit opportunity there.

I like VMware, Inc. (NYSE:VMW) for the role I think it has to play in the future. I need a better understanding of NetApp Inc. (NASDAQ:NTAP) before making a decision, but I want to see what it plans on doing to increase revenue growth. Right now, it is leaning heavily on flash storage for servers, but it has yet to bring in massive profits.

The article Data Is Exploding, Buy Cloud Storage Providers originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.