Mike, sorry I didn't get back to you earlier on Seagate. As I am a fundamentalist at heart, here's my take on the FA:
The fundamentals are VERY strong. For the next 5 quarters, SEG has a projected growth rate of 45.6%, and with a p/e of 13.5, the value in this stock is tremendous. Debt at 19%, current ratio at 2.97, a very healthy cash position at $9.61 per share, a strong ROE of 24%, and a p/sales at just above 1. I must say that I am very impressed.
Unfortunately, the inventory buildup is a very real problem for the industry, which seems to have negatively affected the industry.(By the way, keep your eye on APM; it's not a wedge now, but it could be one someday)
Compared to the other disk drive makers, there's WDC, with 60.0% projected growth for the next 5 qtrs, p/e of 12, 0% debt, current ratio of 1.45, cash at $5.25, ROE at 43%, and PSR of .6.
Both these players are strong and are estimate beaters. APM isn't as impressive, as it is expected to have lower earnings in the next few quarters.
Technically, both WDC and SEG seem to have shown support at its 200 day line. WDC closed below its 200, it seems, but it has done this before and bounced off successfully. Only SEG has managed to stay above this level consistently.
This brief research into these two companies almost makes me want to buy some of both. The fundamentals are very attractive, but unfortunately the industry is experiencing some headwinds. After these concerns blow over though, I think there's some good potential here. But I will take a wait and see approach for now.
Regards,
Rainier |
