PX,
Your scenarios are not mutually exclusive. What is your target price if a few of them are true?
Brian, Glen, et al. You guys are putting too much weight on PE for valuating WDC at this juncture. Take a few steps back and look at the broad picture. The E part of the PE is completely unreliable. No one knows the impact of a full blown price war, if one errupts at all. PE, in itself, is a meaningless indicator. You need to compare it growth, historic, industry or whatever you prefer.
For all practical purposes, SEG already announced they are going to have a negative E this qtr. They will try their best to shift losses and call them one time restructuring charges. Is the $.20 to $.30 range for WDC reliable? If their estimates can drop from the $.80 range dn to the $.20 range, can we rule out $0 or even a red number? How do you value a stock with a negative growth rate?
In summary, the DD sector has a lot more questions than answers at this time. Short term, my guess is that we are heading down before up.
Ramsey |
