Bert has written up another company - NetApp. It’s a good write up and I agree with everything he writes… (except I sold rather than bought but that’s another matter)
NetApp was a good holding for me which I held through the go go years of storage together with EMC. The party ended as storage moved from disc to flash and on premise to cloud.
Now I think NetApp as an incumbent did better than anyone else to stay alive - although I liked what EMC was doing with Pivotal and VMWare right up to the point that they sold out to Dell.
NetApp has done the best (out of EMC, Dell, IBM etc) to reposition itself into the Flash mainstream - at the expense of self cannibalising its traditional business and is also getting into hyper converged infrastructure - via the SolidFire acquisition.
These 2 opportunities I love and are classic Saul growth trend opportunities. However as class as NetApp is and as much as I applaud it for re-inventing itself, I prefer to be in: Pure Storage for Flash Exposure, Box for cloud storage and I am looking at Nutanix for hyper converged infrastructure.
Whilst NetApp isn’t over valued and will certainly grow - and increasingly so, it is towing its legacy business and until it has swallowed and digested all of it, will exhibit a blended single digit growth rate instead of the double and triple digit growth that the new opportunities alone represent.
For now - Pure Storage and Nutanix (and Box) are my plays but I might consolidate back into just NetApp in the future once there is no legacy dilution factor. Hopefully by then Pure and Nutanix will be profitable and have hit the standard 20,000% growth target and NetApp will still be at a P/E of 12.