Saturday, May 12, 2012

"The world is storing and managing a mountain of data, video, and stored photos. Who is at the forefront of this effort? VMWare"

Dow Jones Industrial Average 12820.60 (Down) Week Ending 05-11-2012

Facebook goes IPO next week
Next week, the long awaited Facebook public stock offering comes out. I would not buy it at the open, but wait until the stock settles out in a trading price range. This offering will also bring stocks along with it on it's coattails. One of those stocks is game maker Zynga , (Symbol ZNGA, $7.48), and another is the data gurus at  VMWare , (Symbol VMW, $120.32), which I will discuss today. There will be many more to discover.

According to the website DataCenter Knowledge, Facebook has as of October 2009,  30,000 servers. God knows how many they have to manage now in 2012. As of that October date, they were processing and storing 25 Terabytes of data per day. That is 1000 times the daily data volume of the US Postal Service.

 According to social media , the worlds information is doubling every two years. That is 1.8 ZettaBytes of data compounding every 2 years. That is the equivalent of 200 billion HD Movies  each 120 minutes long.

Who is prepared to deal with this growing mountain of data?  VMWare , (Symbol VMW, $120.32).
The Palo Alto, CA. based VMware, Inc. provides virtualization and virtualization-based cloud infrastructure solutions from the desktop to the data center and to the cloud. 

"Oh, that explains it!"
VMWare, according to is projecting 2012 earnings of $2.70 per share and 2013 earnings of $3.16 per share. There are 24 Strong Buy recommendations on the stock. The company has 5 Year sales growth of 36.83% and 5 year Earnings growth of 35.22% per share. VMW, also has 19.85% Net Profit margins. The PEG ratio on the stock is 1.51. The IDB rating on the stock is 97/98/84.

The bargain here is that the one year total return this year has only been 8.92%. So the stock has been taking a breather.  The 3 year Total return on the stock however is 278.96%. That number has a much better ring to it.

I would add 25 to 50 shares of the stock to your portfolio right here at this price.

In other NEWS, Jamie Dimon and his JP Morgan bank buddies made a bad trade this past week. The financial media jumped all over it as another case where the taxpayers and FDIC could somehow be involved in this risk. People seem to forget that the House of Morgan does thousands of successful trades each week and also that they were forced to take 25 Billion in TARP funds which they paid back quickly,  in full

So in the immortal words of New Jersey Governor Christie, unless you are a JPM stockholder, ..... " Just SHUT UP!!"   

It should be a fun week next week and the Facebook IPO could jar loose more Retail investors to get back in the market. (I have never been out of it!)


P.S.  ( "How much is a ZettaByte"?  

       Answer:  Zettabyte 
     1,180,591,620,717,411,303,424 bytes or 270
     approx. 1,000,000,000,000,000,000,000 or 10

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