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Strategies & Market Trends : Puff Daddy's Mo' Money Mo' Problems -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (704)	4/1/2000 1:13:00 AM
From: SouthFloridaGuy	Respond to of 896

BUSINESSWEEK INVESTOR -- INSIDE WALL STREET The Hidden Gem at Western Digital Once a high-flying technology stock, Western Digital (WDC) fell out of favor when the disk-drive business went into a downturn a couple of years ago. 'The stock was trading as if Western Digital was going out of business,' says Dane Lewis, an analyst at Robertson Stephens. That was in November, when the stock had fallen to 21 3/16. But it has since bounced back to 7 3/16. 'We believe the disk-drive business will emerge from the downcycle,' says Lewis, who has upgraded his rating on the stock to a buy. There is another reason for his bullish stance: Western has an unappreciated gem in its network storage business, which he estimates is worth $500 million to $1 billion. The storage business, where demand has been exploding because of Internet growth, is not reflected in the stock price,' says Lewis. Considering that Western's market cap is about $1.1 billion, investors are getting the company's Connex NAS (network attached storage) systems unit for peanuts. Connex' entry into the NAS market, according to Lewis, is well timed to participate in the rapid growth of network storage appliances. Researcher Dataquest sees the NAS market growing from $855 million in 1999 to more than $6 billion in 2003. Connex has sold products of its NAS systems through some big U.S. distributors, including Ingram Micro. Lewis thinks Western has opportunities to sell its products to original equipment makers. Western's disk-drive business, says Lewis, will survive the current downcycle. He figures Western's cash levels and sources of cash, totaling more than $500 million, are sufficient to carry the company through the downturn. By GENE G. MARCIAL