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Technology Stocks : Western Digital (WDC)

WDC 163.26

+3.5%

12:59 PM EST

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To: William T. Katz who wrote (8012)	12/4/1997 1:54:00 PM
From: Pierre-X	Read Replies (3) of 11057

Well you've got your views of portfolio theory and I've got mine. Let's talk about QNTM. Let me play the devil's advocate for a moment. If the following facts are correct: 20% Revenues from DLT => 80% Revenue from DD 1553 Sales in Sep quarter => 1242 Sales from DD 60% Income from DLT => 40% Income from DD 103.7 Income in Sep quarter => 41.8 Income from DD => 3.3% net margin DD at QNTM vs 5.8% net margin at WDC Check my numbers? The data I have show that total net margin at WDC has exceeded total net margin at QNTM in every quarter back to Dec95. Higher DLT margins than DD margins at QNTM would impliy an even greater spread in DD margins between the two companies. You've stated before that the worst case scenario for DD profits is zero. But isn't it possible for large losses to occur in DD from D&A on the capital investments? I note that they reported 45.4 of D&A in the Sep quarter. PX

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