EMC Corporation (NYSE:EMC), with 11,200 employees worldwide, over $4.9 billion in 12-month revenues and $1.08 billion in net income, is the world's leading supplier of intelligent enterprise storage systems for mainframe and midrange environments.  Fueled by the strong demand for storage capacities for millions of Internet Web pages, e-mail and sales transactions, together with the acquisition of Data General Corp. this year, EMC revenue is expected to exceed $6 billion in the year 2000.

EMC's core products, the Symmetrix 3000 and 5000 systems, are the number one choices for enterprise storage solutions by major corporations such as eToys, MCI, Mitsubishi Electrics, Singapore Airlines, the Philadelphia Stock Exchange and the Chicago Board Options Exchange.

Critical Path, the leading Internet solutions provider of  full-service email and messaging solutions to corporations and Internet Service Providers,chooses  EMC products and solutions to handle two terabytes of storage coming online every month as the company adds millions of new mailboxes.

We believe that the strategic alliance between Oracle and EMC to optimize and integrate Oracle8i database products to EMC Enterprise storage systems and software, could pose a threat to the Hewlett -Packard and Hitachi storage technology alliance as well as to Hewlett-Packard's long-term growth in the enterprise storage business. Earlier this year, Hewlett-Packard decided to stop reselling EMC storage products in favor of Japan's Hitachi Data Systems despite the fact that  the Hitachi system is at least two years older, according to Mr.Michael Ruettgers, EMC chief executive.

Although Hitachi's system was less expensive at the time, the recent rise in the Japanese Yen could drive the price of Hitachi's system higher, with EMC's storage products becoming more attractive to customers in both technology and price point.  As reported in Bloomberg, HP experienced unspecified declines in its storage machine sales in the fiscal third quarter and attributed the slump, which it said it had expected, to the decision to stop selling EMC's machines. As pointed out by Mr. Thomas Mancino, a Pacific Growth Equities analyst in Bloomberg, "Hewlett-Packard is shooting itself in the foot by risking its relationship with EMC.''  Mr. Mancino rates EMC as a "strong buy".

Fundamentals: Our data suggests that investor sentiment for EMC's shares has steadily increased since its drop to the all-time low of 1.61 on May 6 resulting from Hewlett-Packard's announcement to stop selling EMC products. We believe that investor sentiment for EMC's shares could move higher toward the year-end as the Y2K slowdown issues disseminated by Wall Street's analysts earlier this year prove to be unfounded.

Based upon our "growth" P/E model, we believe that EMC shares are relatively inexpensive compared to other high technology companies with comparable growth. With expected 1999 earnings growth of 45.3 percent and consensus 2000 estimated earnings growth of 40.4% percent, we estimate EMC's mean earnings growth for 1999-2000 to be 42.9 percent. Taking into consideration that demand for storage systems will increase in the coming year, and that EMC possesses the most technologically superior storage technology along with the strong strategic alliance with Oracle, we believe that EMC's "growth" P/E for the year 2000 could be in the range between 2 and 4.  Based upon this figure, our model suggests a 12-month price target for EMC to be in the range between $140 and $200. The above estimation could be affected by investor sentiment in which the price target could move up or down as investor sentiment increases or decreases.