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[February 08, 2014]
Spotlight On: Three Strong Data Storage Device Makers
(Equities.com Via Acquire Media NewsEdge) As tech companies collect more and more and more data, storing it has become a bonafide multi-billion dollar industry. Not to say that companies collecting this data have any idea what they want to do with tall this information. But those ones and zeroes have theoretical value, especially when they possibly contain the secrets of consumer's spending habits.
To what degree Big Data is as disruptive to the market as the tech geeks think is irrelevant to data storage companies. What is for these companies, notably their bottom lines, is that companies need hardware to store the data. Sifting through the terabytes takes time, after all.
This says nothing of regular, "Little Data" consumers who simply want to adhere to the tech commandment to "back everything up." But whether big or little, data storage is a booming biz, and certainly worth looking at from an investment perspective.
Like any other industry, not all data storage makers are created equal, and in fact maybe none of them would be quality plays at all. But we wanted to look fand see if any had impressive metrics, and were worth a closer look.
First thing: we found 19 companies that currently trade on the NYSE or NASDAQ that specialize specifically in data storage. To isolate the best plays, we applied two pieces of criteria: The company must have an analyst consensus of at least "buy."The company must have a gross margin above 50 percent.
The gross margin shows profit after just the development costs. If the company isn't making significant money there, the product is likely doomed.
We found three tech plays that fit the bill They are: EMC Corporation (EMC) Price: $24.62 Market Cap: $50.66 billion P/E: 18.51 Nimble Storage Inc. ($NMBL) Price: $44.90 Market Cap: $3.16 billion P/E: N/A Teradata Corporation (TDC) Price: $42.13 Market Cap: $6.87 billion P/E: 18.40
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