Jeremy Grantham (Trades, Portfolio) is the chairman and co-founder of the investment firm Grantham, Mayo, Van Otterloo & Co. LLC, which is based in Boston. The firm was founded in 1977 with a partnership between Grantham, Richard Mayo, and Eyk Van Otterloo. Initially the three partners were solely managing U.S equity portfolios. As the years rolled on, the firm expanded and became a globally diversified investment firm.
GMO currently owns 543 stocks with a total valuation of $27.8 billion.
In the fourth quarter of 2015, the firm added an additional 5,709,582 shares of EMC Corp. (EMC, Financial).
EMC is a global leader in enabling businesses to transform their operations and deliver technology as a service. EMC focuses on products and services to help IT departments to store, manage, protect and analyze information in a more cost efficient way.
The company works with organizations around the world in countries including Brazil, China, France, India, Ireland, Israel, the Netherlands, Russia, Singapore and the U.S. The company works with organizations in multiple industries, in the public and private sectors ranging from startups to Fortune 500 companies.Â
EMC has a market cap of $46.78 billion, a P/E ratio of 20.30, an enterprise value of $48.1 billion and a dividend yield of 1.91%.
EMC has invested $20.7 billion in their research and development since 2005. The company invested this money to improve their core business as well as to extend their business globally. EMC has also invested $16 billion in acquisitions during the same time period and has integrated more than 75 technology companies across the world.
Below is a Peter Lynch chart for EMC Corp.
According to GuruFocus, EMC has an 8/10 profitability and growth rating and a 11.50% operating margin, ranking the company higher than 83% of the companies in the global data storage industry.
EMC has a few good signs according to GuruFocus. The company has a 4.5-star predictability rating and they have consistent per share revenue and growth. The company is expanding, having invested $16 billion in acquisitions worldwide since 2005. The company’s dividend yield is also at a three-year high, which is another good sign.
Investors such as Ken Fisher (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Seth Klarman (Trades, Portfolio) have also been buying shares of EMC, which is another good sign.
I recently went through the company's SEC filings and they believe these are their biggest risks:
- The difficulty in forecasting customer preferences or demand accurately.
- The inability to expand production capacity to meet demand for new products.
- The inability to successfully manage the interoperability and transition from older products.
- The impact of customers demand for new products on the products being replaced, thereby causing a decline in sale of existing products and an excessive, obsolete supply of inventory.
- Delays in initial shipments of new products.
The company has invested $20.7 billion in research and development and $16 billion in acquisitions worldwide since 2005, and they have a 8/10 financial rating according to GuruFocus. The company has been able to invest capital while expanding, without falling into debt, which is a very good sign.
I recently went onto the company's website to ask them a few questions about their products and services, and they responded very quickly, showing me that they are efficient and have excellent customer service.
The value of EMC outweighs the inherent risks. I believe that Jeremy Grantham (Trades, Portfolio) made a good investment decision to purchase an additional 5,709,582 shares of EMC Corp.
Cheers to your investment success.
