EMC CORPORATION

1
EMC CORPORATION

• An Overview of Financial Performance
• November 20, 2007
• Analysis by Stephanie Snyder and
• Corrie Livesay

2
Key Statistics
EMC As of 11/20/07
Purchase Price 12.98
Current Price 19.16
52 Week High 25.47
52 Week Low 12.57
Beta 1.89
Current P/E 27.50
Forward P/E 26.90
5 Year Est. Growth Rate 14.19
Earnings/Share .71
SOURCE moneycentral.com
3
Recent News

• EMC innovation strategy goes beyond storage The
  company wants to be
• known as an information infrastructure vendor
  now.
• Kathleen Lau (ComputerWorldCanada) 19 November
  2007
• Lewis, along with other EMC executives discussed
  the company's plan to continue innovating through
  research and development, acquisitions,
  integration, and partners at an EMC Innovation
  Day Wednesday.
• This year, EMC spent 12 percent of its revenue on
  RD, and an average of US2 billion a year
  acquiring 30 technology companies over the last
  four years, with the goal of providing customers
  "best of breed innovative products and solutions
  for their information infrastructure needs,"
  according to EMC's chairman and CEO, Joe Tucci.
• EMC CEO Has 'No Intention Of Selling VMware
  Stake
• By WILLIAM M. BULKELEY
• November 14, 2007 250 p.m.
• EMC Corp. chairman and Chief Executive Joseph
  Tucci said in a speech in Boston to technology
  analysts that he has "no intention of selling
  more of VMware," which is 86 owned by EMC.
• EMC sold a minority stake in VMware Inc. to the
  public in August in the hottest initial public
  offering of the year at 29 a share.

4
5 year stock performance
SOURCE moneycentral.com
5
Analysts Targets
SOURCE smartmoney.com
6
Growth Rate

• No dividends.
• Find growth rate for sales over past 4 years.
• (11,155,090/5,438,352)(1/4)-1 19.67
• Analysts recommended a 16.3 5-year growth rate
  so we took the average to find a growth rate of
  18.

7
3-stage Growth Model
8
Technical AnalysisBollinger Bands and RSI
9
Technical AnalysisMoving Averages
10
Relative Valuation
P/E EPS 2007 2008
Current P/E 27.6 Low Estimate .67 .74
Forward P/E 27.4 Avg. Estimate .72 .85
Industry P/E 22.8 High Estimate .78 .95
2007 EPS (.67) 2007 EPS (.72) 2007 EPS (.78) 2008 EPS (.74) 2008 EPS (.85) 2008 EPS (.95)
P/E 22.8 15.28 16.42 17.78 16.87 19.38 21.66
P/E 27.4 18.36 19.73 21.37 20.28 23.29 26.03
P/E 27.6 18.49 19.87 21.53 20.42 23.46 26.22
Scenario Est. Return 2007
Worst -22.20
Expected .46
High 9.62
Scenario Est. Return 2008
Worst -14.10
Expected 18.58
High 33.50
SOURCE moneycentral.com
11
Recommendation

• This is a stock that you want to hold for the
  long-term.
• The stock has done fairly well. No negative news
  at this point.
• The intrinsic value suggests we have exceeded our
  best estimate, but on the other hand, the
  relative value and the analysts opinions
  suggest there is more money to be made.
  Therefore, we should continue to hold this stock.