Why EMC Corporation Might Keep Rallying

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of EMC Corporation gained about 1% today after Wunderlich Securities initiated coverage on the data-storage giant with a buy rating.

So what: Along with bullish call, analyst Kaushik Roy planted a price target of $31, representing about 14% worth of upside to yesterday's close. So while contrarians might be turned off by the stock's strength over the past month, Roy's call suggests growing confidence on Wall Street over the sustainability of EMC's recent growth trajectory. 

Now what: According to Wunderlich, EMC's risk/reward trade-off is pretty compelling at this point. "The company is executing very well and has grown faster than the markets in which it is participating by gaining market share," said Roy. "We believe EMC can grow its revenues faster than the overall growth rate of the Information Technology market. EMC has solid cash flow from operations. The company has a strong management and technical team." When you couple those positives with EMC's still-cheapish forward P/E of 12, it's tough to disagree with Wunderlich's upgrade.

More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

The article Why EMC Corporation Might Keep Rallying originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of EMC. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story