Cramer Puzzled on EMC/VMware (EMC, VMW, TXN, GOOG, CSCO, INTC, SLB)

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On today’s STOP TRADING on CNBC Jim Cramer said investors can now focus on what is cheap again and he was positive on Schlumberger (NYSE:SLB) with it to go back to $95.00.  His real picks were in technology: Texas Instruments (NYSE:TXN), Google (NASDAQ:GOOG), Intel (NASDAQ:INTC), and Cisco Systems (NASDAQ:CSCO). 

Cramer was very positive on EMC Corp. (NYSE:EMC) as one of his charitable trust positions, but oddly enough he said he is surprised that it has been been not acting too strong since it still owns most of VMware (NYSE:VMW) after the partial spin-off and IPO.  If you are a reader of the Special Situation Investing Newsletter, you aren’t surprised at all on EMC (sample on EMC/VMW now off embargo).  It looks and feels like the valuations of VMware are in the stratosphere right at the time that the emerging virtualization market is getting rapidly crowded.  The super-low free float has a lot to do with this strong performance.  There just aren’t enough shares for fund managers to have very much of on their books since EMC is hoarding 87% of the stock and almost all the votes.  We’ve seen this play book before on widely telegraphed partial spin-offs like this and VMware is really more of a tracking stock right now than they would have you believe.

Jon C. Ogg
August 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.