QNTM prereleases disappointing earnings. Attributes a great portion to DLT tape drive biz (which WDC has no part or) and continued pressure in desktop drive business (of which WDc has a nice part of).
Some of the best money is made buying stocks when blood is in the streets. Wall street goes to extremes and discounts potential, often greating opportunities for those who can stomach the risk and volatility.
WDC is at 16 3/4 down from a year high of mid 50-s. My feeling is that the whole sector will start week tommorrow but stabilize by mid-morning. I would expect to see a low of 16ish for wdc tommorrow. I would consider that any great discount, but would be a buyer if they decided to take abigger bite out of this stock.
IN my opinion, WDc is the most efficient, well managed of the group. The entire sector has been blow out in line with its recent cycle. As all cyclical industries, this one will eventually rotate and wdc should be able to make its way back as a leader with SEG. QNTM is a less favorite because of their concentration in desktop. WDC's shift to enterprise, higher end solutons with higher prices and fatter margins, also makes wdc a more compelling case.
Remember, you cannot have a time from of three weeks with such a beaten down sector. Give the sector 12 to 18 months to recover and if at that point, hard drives have not gathered themselves, say goodbye and move to the next possible investment.
Remember, lower is better unless you own it already.
Regards,
Steve@yamner.com |
