NetApp Inc. (NTAP), EMC Corporation (EMC): Why Are Investors Happy About This Company’s Prospects?

ON TAP 8.2 also increases the scalabity of NetApp’s solution. Currently EMC’s V-MAX array dominates the SAN market at the top end. In 8.2, the number of nodes/controller increased from four to eight, which should allow NetApp to compete in this market with EMC.

A concern for NetApp is their ability to displace an entrenched EMC Corporation (NYSE:EMC) in certain markets. NetApp needs to develop sales channels where it traditionally has not been a player.

Conclusion

The dividend and share repurchase programs are encouraging, but potential growth versus easy comps from 2012 from ON TAP 8.2 are the most compelling reason to own the shares. The stock is not expensive compared to historical levels and is actually trading at a discount. If it can execute, the expected growth rate should expand as should the earnings multiple on the stock, driving shares higher.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool owns shares of EMC. Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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