+ Watch WDC
on My Watchlist
Western Digital Corp. designs, develops, manufactures, and sells hard drives for data storage.
nice PE/yld combo
Theory test: Poor performers for 2015 will continue to be poor performers in 2016
Western Digital is a leader today, it generates regular cash flow, it has $3 billion in cash and investments, it is repurchasing shares, and it sells for low multiples of sales and earnings. Also, its focus on expanding into SSD makes sense, but I don’t think management (even with liberal spending on research and acquisitions) will be able to overcome the death of HDD.
WDC has nowhere to go but down, given that solid state memory is advancing much more rapidly than most predicted even a year ago. At the consumer level, users are quickly hooked by the speed and ease of SSD, compared to the relatively slower hard drives. And increasingly consumers are using smart phones and tablets to access the internet - neither of which use hard drives. There will continue to be an enterprise market for hard drives - for instance in the data farms of Google, Amazon, and many other companies. But the high volume and profit margins of the consumer market are quickly disappearing.
Great valuation metrics to go along with a 1.52% yield. As more data is created, more data storage is needed. So this is a continually growing business. WDC's HDD's are used in consumer electronics: PCs, gaming systems, printers, set top boxes, and auto navigation systems to name a few of the applications they are used in. It also offers external storage appliances. They sell to computer manufacturers, storage subsystem suppliers, and social media infrastructures. I will hold WDC for a very long time.
Get killed by Intel
With the amount of data created everyday and the transition to digital, all this data has to be stored on hard drives. Medical records are being kept electronically and with the aging US population, this will require a lot of hard drive space. Also cloud computing will require hard drives. Personal digital content is also increasing. I can't remember the last time I bought a CD. Disney's release of Little Mermaid is now being sold with a digital version. I am now considering buying WD personal cloud storage system so that I can access any of my digital content from anywhere. Convert the old CD collection to digital and free up shelf space.
Going long on WDC!!!! Cloud storage will continue to increase and with the acquisition of Velobit in July and recent acquisition of stec they look to be making a nice transition into getting there portion of the SSD market. From a tech background I love their product and currently use many of them which is always a fundamental basis on how I pick certain buys. Go long my friends!
Many investors have stayed away from this particular company because of the up and coming industry of cloud computing.... but all that cloud storage has to be on a hard drive somewhere. Western Digital is a long time player and first mover in the hard drive and data storage business. They are a solid company with a forward P/E just below 8 as I write this pitch. It also distributes a decent dividend which is always a plus in my investment book. Also inside ownership, profit margins, and ROE are all in the double digits. The business has solid financials with an equally solid track record. I say GO LONG! FOOL ON!
TMF Spiffy Pop
My friend Jim Mueller just said, over lunch, that this is one of his potentially favorite stocks of all, going forward. His premise is that while everything's going to the cloud, guess what the cloud is built on? So hey, I'm a Jim fan -- taking a flyer here on his word. Jim, don't let me down. Outperform.
Hard drives will always be in demand no matter what. Increasing demand for cloud storage will cause cloud storage providers to demand more hard drives. Even if the demand for cloud storage decreases (due to recent privacy/security scares), consumers will need to store their information on something, so they will end up purchasing their own hard drives.
For reference point and to allow for comments by others. As of the end of March, 2013.ROE 25.13%Trailing PE 7.51PB 1.67Div yield 1.70%
Undervalued according to my intrinsic value calculations. The investing community has overreacted to the decline in demand for desktops/laptops vs. mobile devices and SSD vs. HDD with regard for demand of HDD. The shares of STX & WDC were already low following the flooding in Thailand in 2010 that affected component suppliers.
Strong core business plus starting a dividend
Strong management team, especially now they have HGST under their arms.
The shift to SSD will be long and expensive.
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ratings and Key Statistics provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions