Mware (VMW)
New Issue, Huge Opportunity
Every now and again a big, dominant company with huge growth and an
even bigger market opportunity comes public on Wall Street. Google
was a prime example, when it came public in August 2004 (ironically,
near the market bottom of that year). And we believe VMware, which
was spun-off from storage giant EMC just two weeks ago, has the
potential to follow in Google's footsteps, performance-wise.
VMware is the undisputed leader (market share estimates range from
80% to greater than 90%) in virtualization software for servers, a
new, rapidly-growing industry. In the company's words, its software
"separates operating system and application software from the
underlying hardware." In layman's terms, that means servers can run
multiple programs and operating systems at the same time, thereby
boosting the efficiency of each server - often in a very big way.
And that means big companies with big Internet operations can run the
ship with far fewer servers, which translates into big costs savings
(data center space, power consumption, server purchase costs, etc.).
Microsoft is supposedly trying to enter this lucrative market, but
its system probably won't be available until the end of 2008.
Meanwhile, VMware's customers already include all of the Fortune 100,
84% of the Fortune 1000, and 20,000 firms in all. Looking ahead, one
analyst believes the number of servers using virtualization will rise
from 540,000 last year to a whopping four million by 2009. So
virtualization is catching on big-time, yet still has huge potential
going forward.
VMware has been growing sales at an 80% to 100% rate, and should
collect a billion dollars of revenue this year. Earnings are also
jumping, up from $0.18 two years ago to $0.23 to an expected $0.60
per share this year. We believe that most big, growth-oriented
mutual funds will be looking to buy into VMware - there simply aren't
that many large, liquid growth stocks with these kinds of prospects.
It's still too early to buy into the stock, but keep it on your watch
list. WATCH.
*********************************************
New IPO--out 2 weeks during horrible market downturn---I bought in after market today...
New Issue, Huge Opportunity
Every now and again a big, dominant company with huge growth and an
even bigger market opportunity comes public on Wall Street. Google
was a prime example, when it came public in August 2004 (ironically,
near the market bottom of that year). And we believe VMware, which
was spun-off from storage giant EMC just two weeks ago, has the
potential to follow in Google's footsteps, performance-wise.
VMware is the undisputed leader (market share estimates range from
80% to greater than 90%) in virtualization software for servers, a
new, rapidly-growing industry. In the company's words, its software
"separates operating system and application software from the
underlying hardware." In layman's terms, that means servers can run
multiple programs and operating systems at the same time, thereby
boosting the efficiency of each server - often in a very big way.
And that means big companies with big Internet operations can run the
ship with far fewer servers, which translates into big costs savings
(data center space, power consumption, server purchase costs, etc.).
Microsoft is supposedly trying to enter this lucrative market, but
its system probably won't be available until the end of 2008.
Meanwhile, VMware's customers already include all of the Fortune 100,
84% of the Fortune 1000, and 20,000 firms in all. Looking ahead, one
analyst believes the number of servers using virtualization will rise
from 540,000 last year to a whopping four million by 2009. So
virtualization is catching on big-time, yet still has huge potential
going forward.
VMware has been growing sales at an 80% to 100% rate, and should
collect a billion dollars of revenue this year. Earnings are also
jumping, up from $0.18 two years ago to $0.23 to an expected $0.60
per share this year. We believe that most big, growth-oriented
mutual funds will be looking to buy into VMware - there simply aren't
that many large, liquid growth stocks with these kinds of prospects.
It's still too early to buy into the stock, but keep it on your watch
list. WATCH.
*********************************************
New IPO--out 2 weeks during horrible market downturn---I bought in after market today...
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