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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: IndependentValue who wrote (51975)	8/1/2013 2:48:36 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78656

Hi, I pretty much agree with you. I have somewhat large position in WDC/STX. I probably won't add here, but they still look somewhat cheap if you don't think that disk demand will continue to drop. Risks: - SSD conversion on client machines - mostly still not there. Last time I looked the prices were still about 10x vs HDD. Still it's a risk if the prices drop to 5x or below. To be watched. - Tablets/phones/ultrabooks displacing laptops/desktops. Somewhat real risk although perhaps overstated. Can kill 5-10% of sales in a year... not sure how much longer term. - Diworsefication: if WDC/STX try to burn cash to get into SSD space, they might throw good money into the fire. SSD market will be supercompetitive for next 5-10 years like HDD was in 90's-2Ks. WDC/STX have oligopoly in HDDs, they should not waste that advantage. Note that "enterprise/cloud will carry WDC/STX" argument is somewhat hollow. Look at percentage of their sales to enterprise. If clients stop buying HDDs, these co's will lose over 50% sales. Personally, I just bought a NAS with WDC Red 3Tb drive for photos/movies/etc. But anecdotes don't carry companies either. :) Good luck

To: IndependentValue who wrote (51975)	8/1/2013 3:34:12 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78656

WDC. I'm in from last September. The stock's a hold for me at current price. Generally sells at low p/e; generally has high ROE --- a Greenblatt fit now (imo). My view: stock could/should/might, in an okay tech market, sell for about a 10x earnings. Average earnings projection (per Yahoo) for 6/'14: $8.13; so maybe I might call full value about $82/sh. Otoh, that range of estimates from the 28 analysts is $6.78 to $9.89. I note the d/e level has increased--- I don't view that favorably. There's a small dividend while I wait to see what happens. ==== I'm not a fan of W. Tilson. To put it mildly. ========== Welcome to the thread!