Good evening Ken and Amigos. I am trying to catch up with the activy that I missed the last few days. First on my list is YYYYEEEEHHHHAAAAWWW on WDC's earnings released on Thurs.
The report confirmed that WDC is moving along according to management's plan. Keeping in mind that WDC is a turnaround in progress,the positives from the report are:
* Reduced losses. (-1.32/share yr. ago)
* Reduced debt.
* Revenue increased by $33 million including the one time gain from $11.3 million sale of stock.
* Ahead of analyst's estimates, beating the mean estimate by two cents/ share, loss of .30/share vs expected loss of .32/share.
* Improved pricing at OEMs resulted in improved margins.
* WDC is demonstrating progress in entering into new niches in the storage industry, such as NAS.
We are now kicking into disk drive/storage sector's historic best season. The just completed quarter is traditionally slow and the sector has been affected by profit taking, off almost 20% from its highs is Sept., but the sector is ready to continue the turnaround with strong growth anticipated for the current quarter.
207.61.23.98
Large block buying resumed on WDC all day today, ending with a 180,000 share buy at the bid at the close. WDC received favorable reviews from at least two analysts and the storage sector has been touted in the last few days as a buying opportunity by many media outlets, including briefing.com. Everyone seems to be jumping on EMC's bandwagon, but there are other opportunities.
I'll stick with WDC. For those still interested in RDRT, they report next week. For anyone interested in the sector, an opinion on storage stocks from Ben Koppel, broadcast on CNBC this evening:
<Analysts Putting Money in Storage
Analysts seem to be putting their money in storage these days...storage networks that is
Despite a sell-off this past week in which EMC, NTAP, and BRCD all lost double-digit numbers in their share prices, analysts remain bullish
Dave Bailey of Gerard Klauer Mattison says this week's sell-off can be attributed to weakness in stocks like NT, not business weaknesses in EMC, NTAP, or BRCD
Analysts believe the market for storage area networks could expand from $30b now to over $100b in only five years
However, Bill Lewis of Chase H&Q tells investors not necessarily to jump into some of the "cheap" stocks in this sector after this week's sell-off. He advises investors buy some of the industry leaders, who, although they have expensive stocks, will continue to be strong
The stocks he likes are EMC, NTAP, and BRCD
Overall, analysts seem to emphasize this market is barely explored: Mr. Baily believes companies like EMC, NTAP, and BRCD have only begun to satisfy demand, and that it will likely expand very quickly over the next three years.>
Sergio |
