Great Call on EMC! What's Next?

Storage specialist EMC (NYSE: EMC) was a hot name for investors leading up to, and just after, its spinoff of VMWare (NYSE: VMW) in mid-2007. Since then, though, enthusiasm has cooled for both stocks, and EMC has fallen almost 40% from its peak.

Despite the fall -- or maybe because of it -- EMC currently carries a top-notch, five-star rating in The Motley Fool's CAPS community. Although more than 2,500 CAPS players have rated the stock, none has read it better than tabledude. tabledude originally put his thumb up on EMC way back in the fall of 2006 and has earned 83 points in total on two picks for his savvy call.

tabledude is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and he has managed a stock picking accuracy of 66% on his calls while racking up an impressive 938 points. EMC hasn't been his only great call. Here's a look at a few of his other prescient picks:

So what is this investor looking at these days? Here are a few of his most recent calls on CAPS:

While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at Merck.

So much for defense
When recession fears roll in -- as they certainly have lately -- investors rush to adopt the maxim "the best offense is a good defense." Typically, this means piling into companies that can plow ahead against a poor economy -- the soups, cigarettes, and pharmaceuticals.

This doesn't always work out.

Merck, one of the large-cap blue chips of the pharmaceutical world, has put up a Swiss cheese stock market defense that would make last year's Miami Dolphins cringe. With its cholesterol blockbuster Zocor off-patent, Merck hoped that Vytorin, which it jointly markets with Schering-Plough, would fill the void. Early this year, though, results from the Enhance trial buried much of those hopes, as it showed that Vytorin doesn't have any edge on Zocor when it comes to reducing plaque in the arteries.

Though the company reaffirmed its 2008 guidance a few weeks ago, investors were hardly impressed as sales of Vytorin sagged following the release of the Enhance data. And the hits just kept on coming. Last week, the FDA gave Merck a not-approvable letter for its drug Cordaptive, another cholesterol drug that the company had very high hopes for.

The punch-drunk stock is now down 37% from its 52-week high. Where's Mickey when you need him?

But not everyone thinks Merck will continue to be a punching bag. The stock is trading at a mere 12 times its expected 2008 earnings, and it's yielding 3.9%. And some investors, such as CAPS All-Star biotechmgr (who claims to work for Merck), think that the squirrely muse of innovation is still at home at Merck:

Merck is well positioned to become the industry leader over the next 5 years. The product pipeline has swelled under the leadership of Dr. Peter Kim. Innovations in vaccines are focusing on prevention not just cures. Cost savings efforts as well as focus on speed are continuous. Merck wants to be the winner again among big pharma. ... Key acquisitions such as siRNA (ex-Sirna Therapeutics) may provide the platform for current non-druggable targets.

So what's your take on Merck? Get in on the action by clicking over to CAPS. CAPS is absolutely free and already has more than 100,000 stock pickers chipping in to find the best stocks out there.

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Petroleo Brasileiro is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool's disclosure policy made its own great call by chugging an extra cup of java this morning.