NEW YORK (TheStreet) -- Shares of EMC Corp. (EMC) closed higher by 0.73% to $28.47 on Tuesday after the company acquired a data backup and recovery company, Spanning Cloud Apps Inc earlier today.

The acquired company will continue to operate under the Spanning Cloud Apps brand in Austin, TX and will be the foundation of EMC's "born-in-the-cloud" data protection strategy in its core technologies division.

Spanning Cloud Apps is a provider of subscription-based backup and recovery for applications and data, and helps prevent business interruption due to data loss.

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Terms of the acquisition were not disclosed.

TheStreet Recommends

Separately, TheStreet Ratings team rates EMC CORP/MA as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate EMC CORP/MA (EMC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.8%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although EMC's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
  • EMC CORP/MA's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EMC CORP/MA increased its bottom line by earning $1.33 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.33).
  • The gross profit margin for EMC CORP/MA is rather high; currently it is at 69.79%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.74% trails the industry average.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: EMC Ratings Report

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