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RallyCry (< 20)

Grab Some Seagate Mate

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2

February 23, 2012 – Comments (1) | RELATED TICKERS: STX

Seagate Technology (STX)  trading around $27 looks interesting to me. Its had a huge move already in the last 6 months, but is expected to earn $8.66 in 2013 on the average estimate of 17 analysts following. The range of analyst estimates for 2013 is pretty wacky, $4.57 to $12.78.

Seagate does have about 3 billion in long term debt but in the last quarter they paid off $500 million in ST debt, so they have the cash generating ability to get the debt in line. They generated $879 million in operating cash flow in QE DEC 2011 on revenue of $3.2 billion. I project they could cut their LTD in half by the end of 2013 to around 1.5 billion if they maintain their focus on the balance sheet. This should give them a window to clean up the balance sheet if borrowing costs rise in 2-3 years.  

If we assume they earn even just $6 next year at a P/E of 10...we are looking at a $60 stock in the next 12 months. I think this is a pretty conservative projection. Since when is 100% return conservative? I guess with Seagate mate.

1 Comments – Post Your Own

#1) On February 23, 2012 at 5:26 PM, HarryCarysGhost (99.76) wrote:

Ahoy ther!!!

Putting this on Caps so I can view the action.

Cheers.

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