This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

NetApp: Too Late for Cisco or Oracle?

NEW YORK ( TheStreet) -- At one point, big data giant NetApp (NTAP - Get Report) was trading at such depressed levels I considered it the top acquisition candidate on Wall Street and suggested that either Cisco (CSCO - Get Report) or Oracle (ORCL - Get Report) should make a play for it.

My argument was based on the premise that as businesses begin to fully embrace the concept of "the cloud," both Oracle and Cisco will want to further their one-stop-shop strategies and make data storage a critical component within their portfolio of services -- particularly Oracle which already specializes in data analytics.

So from the standpoint of synergy, it makes perfect sense to acquire a company that specializes in data storage. NetApp has not only been growing its market share, but has done so consistently by making data an area of focus and establishing an approach to storage architecture that appeals to a broad range of customers.

What's more, at the time I offered that opinion, the stock was making a new 52-week low. Fortunately or unfortunately, the company has since been performing and executing a bit too well. As a result, it just might have priced itself out of M&A contention.

Recenlty, in its first-quarter fiscal 2013 earnings report, NetApp announced net income of $64 million or 17 cents per share on revenue of $1.445 billion -- arriving in line with its previously stated guidance. On a non-GAAP basis, EPS arrived at $156 million or 42 cents per share. The company beat street expectation on earnings while meeting analysts' revenue forecasts. The company's president and CEO Tom Georgens offered this:

NetApp produced non-GAAP earnings per share above and revenue in line with our prior guidance. In Q1, we announced further innovations in Data ONTAP® 8.1 that will enable customers to achieve an agile data infrastructure environment to cope with their dynamic business requirements. We continue to deliver on multiple fronts, advancing our technology and partnerships. With our best-of-breed partnering strategy and ongoing innovation-led solutions, we enable our customers to scale their business without limits.

Without question, NetApp along with EMC (EMC - Get Report) are the two dominant names in the critical data storage market that is always a top priority within enterprise IT. Though these two giants have traded neck and neck over the past couple of years, however, it would appear that until recently investors had made up their minds regarding which of the two presents the better value.

For NetApp, since reaching a high on the year of $46.80 on April 3, the stock was down as much as 40% -- remarkably this comes on the heels of the company not only having reported better than expected third-quarter earnings results, but also offering an outlook in line with Wall Street expectations.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CSCO $29.80 -1.30%
EMC $28.56 -1.10%
IBM $160.98 0.31%
NTAP $38.25 -0.86%
ORCL $43.44 -1.30%

Markets

DOW 18,191.65 -96.98 -0.53%
S&P 500 2,107.47 -9.92 -0.47%
NASDAQ 4,980.3470 -27.7490 -0.55%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs