Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

STX 257.99

-1.7%

Nov 14 9:30 AM EST

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To: Z Analyzer who wrote (818)	4/14/1999 1:48:00 PM
From: Robert Douglas	Read Replies (1) of 1989

Good quarter for Seagate. Without the charges, SEG would have earned 6.6% on revenues. To put this in perspective, in the 90s there has only been one full year with margins above this. That was 1997 when they earned just over 7%. So if competition is going to kill the margins at the high-end, it hasn't shown up yet. Still, this is where the risk lies. So what's this puppy worth? I've always felt that a company that can earn 5% net margins was worth 20 times earnings or one times sales. Seagate's quarterly sales annualized would be 7.2 billion dollars or about $30 a share. Add to this (my estimates) that SEG's other holdings are worth $15 to $20, and I believe we still have some upside. If SEG can continue to earn this 6.6% net margin, then I think it is worth more. Some top-line growth would be nice also. <g> -Robert

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