by Sam Collins | July 31, 2014 1:36 am
VMware (VMW[1]) — This subsidiary of EMC Corp. (EMC[2]) is a leading supplier of virtualization software. According to S&P, it is well positioned to leverage its dominance in the server virtualization market and should benefit from an economic uptick in emerging markets.
Last week, the company reported Q2 earnings of $0.55 per share, which was in line with estimates. Revenues increased 17.2% to 1.46 billion, which was at the upper end of management’s guided range. Full-year earnings are estimated to increase to $3.52 per share in 2014, up from $3.37 in 2013, and $4.22 in 2015. Analysts’ mean target is $110.66.
I last recommended VMW on March 12[3], when it was trading at $103.68, with a target of $115. The stock topped just under $113 in early April, and then fell under $95. It consolidated in a rectangle with support at its 200-day moving average until Wednesday, when it staged a high-volume breakout with a strong MACD buy signal.
Buy VMW at $100 with a trading target of $115. Long-term investors may want to buy shares at the market for long-term participation in the hybrid cloud sector.
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