It is common knowledge that there are numerous strategies for picking good stocks, but the art of stock-picking is quite cumbersome and complex for most investors. There are thousands of stocks to choose from, so how can individual investors select good stocks or at least avoid risky and bad stocks? Choosing stocks based on a particular criteria using stock screeners might represent a suitable option, but this method can eliminate some high-potential stocks that could possibly generate big trading profits. Before proceeding to the stock selection process, individual investors should clearly formulate the purpose of their portfolios. Depending on whether investors are looking to generate current income or capital appreciation, the pool of stock candidates can differ. Moving on to the stock selection process, investors can also select potential equity investments by examining the basket of most-favored stocks among top hedge fund managers. This basket includes both income and growth stocks, and both small-cap and large-cap stocks, so investors will definitely find something that suits their investment strategies. With this in mind, let’s take a look at the recent hedge fund activity surrounding EMC Corporation (NYSE:EMC).
Is EMC Corporation (NYSE:EMC) undervalued? Hedge funds appear to believe so in increasing numbers. The number of bullish hedge fund bets rose by 12 in recent months. EMC was in 77 hedge funds’ portfolios at the end of December. There were 65 hedge funds in our database with EMC holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Duke Energy Corp (NYSE:DUK), Netflix, Inc. (NASDAQ:NFLX), and The Bank of Nova Scotia (USA) (NYSE:BNS) to gather more data points.
Insider Monkey has spotted a number of investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests (read more details here).
In October 2015, Dell Inc. announced that it had agreed to acquire EMC Corporation (NYSE:EMC) for roughly $67 billion, a “game-changer” deal that will create a powerhouse in the technology industry. The soon-to-be combined company will represent a leader in several high-growth sectors of the massive information technology market. Meanwhile, the merger has already received antitrust clearance from the U.S. Federal Trade Commission, European regulators, and regulatory agencies in several other countries, so the completion process of the deal is well underway. At the same time, Dell and EMC recently revealed the possible Executive leadership team of the future combined company, through an internal memo and a public filing with the SEC. Nonetheless, the transaction is still subject to approval by EMC’s shareholders, regulatory clearance in other jurisdictions and other customary closing conditions. There have also been reports that Dell is having trouble raising the capital to complete the deal, which poses another major hurdle. The shares of EMC have advanced by 2% since the beginning of the year.
Now, let’s analyze the key action encompassing EMC Corporation (NYSE:EMC) as well as an activist’s take on the forthcoming merger.