NetApp Inc. (NTAP): Billionaire Sets His Sights on Data Storage

Cisco and NetApp have been working together since 2003. An acquisition by Cisco Systems, Inc. (NASDAQ:CSCO) would provide Cisco a data storage solution to its networking business. NetApp Inc. (NASDAQ:NTAP) is currently a Cisco Original Storage Manufacturer with rights to distribute Cisco data center switches. NetApp and Cisco Systems, Inc. (NASDAQ:CSCO) combined would offer a single platform for companies to transition to cloud computing.

As trends in technology continue to shift towards cloud computing, this combination would provide added growth for Cisco. An acquisition by Cisco would be easy as well since Cisco has a current market cap of over $127 billion and over $46 billion in cash. At the end of 2012, Cisco saw Edinburgh Partners as its highest conviction hedge fund owner, where the fund had 13% of its 13F portfolio invested in Cisco (see all of Edinburgh’s stock picks).

Assessment

NetApp is indeed an undervalued situation and a possible acquisition target. Paul Singer won’t back down until NetApp pays out more cash to shareholders or puts itself up for sale. Either way, it’s a win-win for shareholders. I recommend investors follow Singer into NetApp and buy the stock. He has proven that he can get the results needed for shareholders.

The article Billionaire Sets His Sights on Data Storage originally appeared on Fool.com and is written by Marshall Hargrave.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of Oracle. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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