Is EMC Poised For a Move Higher?

Shares of the largest data storage company, EMC

are getting a lift pre-market following a positive article in Barron's over the weekend. News that hedge fund Elliott Management has taken a 2% stake in EMC, with aims to force EMC to spin off VMware, a faster-growing, smaller unit specializing in data-center software for servers and other hardware, is providing the impetus for the rise. "A Spinout could certainly pop the stock to around $32," says David Rolfe, portfolio manager of the RiverPark/Wedgewood Retail fund (RWGFX). "But we think it gets there on its own in the not-too-distant future. And management could lever up and buy back a few more billion in stock." EMC has been slowed by lackluster IT spending, which has been rising about at a 2% to 3% annual rate, with more money going to the cloud. Shares of EMC are trading up nearly 1% at 29.32 in pre-market trading.