From Sunday's Barron's:
The following is from an interview with Karl O. Mills, strategist for Oakland-based Jurika & Voyles:
"Seagate Technology is a mid-cap, undervalued technology story. It's the leading independent maker of data storage devices, with particular
strengths at the high end of the disc-drive market, where profit margins are highest. It benefits from the long-term trend toward increasing demand for data storage. The shift from analog to digital, combined with dramatic increases in bandwidth, provides the means to transmit, store and retrieve larger and larger amounts of data. Disc drives are the warehouses of the Information Age. Seagate is financially strong, with over $1.3 billion in cash after buying in 23 million shares in its latest quarter. Also, they recently implemented new and more conservative accounting for inventories to avoid buildups that have plagued the industry in the past. In the year to June 30, 1998, Seagate earned only one cent a share. We see $1.59 this year and $2.30 in fiscal 2000. Our target is $50 against $28 recently. |
