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Technology Stocks : WDC/Sandisk Corporation
WDC 163.00-0.4%Nov 7 9:30 AM EST
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To: franklin1 who wrote (60057)4/6/2016 10:20:56 AM
From: SiliconAlley  Read Replies (2) of 60323
 
Toshiba announced that they went to go ahead with a new factory.. Do you believe that WDC will go forward with them? How will they financially make it happen.

Yes. Funding is already baked into the financial plan.

This August I believe that Samsung contract comes up for renewal-- what will that impact be?

This is the same pattern every 7 years. No impact if not renewed, positive impact when renewed. Concerns over non-renewal baked into current stock price. This revenue was of far more importance to SanDisk on its own, in its current state, than to Western Digital. If not renewed, litigation likely.

How secure is the WDC dividend for next year? If they lower it .. what will it do the stock?

Management has stated their commitment to the dividend, and there is more than enough positive cash flow to cover both debt service and dividends. Concerns over reduction of dividend baked into stock price. I believe is secure over the next 12 months. Where we are trading close to book value, elimination of dividend would have a non-substantial negative effect, likely of a short term nature as stock flushed from portfolios that require dividends as a predicate to holding. It is the dividend that makes this a bargain at these levels. Without the dividend, is not overpriced.

The future of SanDisk was an enterprise play, and the future of Western Digital is an enterprise play. I expect better execution out of Western Digital management, and am more positive on WDC that I was on SNDK.
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