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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas George Warner who wrote (8284)	12/22/1997 5:00:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 11057

Hey all! Just dropping in to say hi and wish everyone a great Holiday Season. The recent drop in WDC can be tracked to a number of factors all relating to the problems the entire hard drive sector has faced: At this point, the company is disliked on wallstreet. Analysts can't recommend it yet to the public and mutual funds want it out of the fund holdings so they don't have to show it on their reports at year end as well as using losses for tax loss offsets. Nonetheless, WDC is still a good company, well run with a great position in the marketplace. If you don't believe in the hard drive sector, you should go to another industry. If you believe these companies are experieced enough to see their way through this, then this sector has a number of well run companies that have great earnings potential. Currently WDC is my favorite in the group. Its trading at a large discount to revenues and recently was making 3-4 per share. SO we know that given more traditional market pressures, the stock should make good money per share. Haggerty is also well known for his quality of management and ability to run the company efficiently. In fact they are more efficient than any competitor in the firld, with absolutely no debt. If you plunked all your money in wdc at 40, you have a while to go, if ever. Doing so with any stock in a bottomfishing approach is never smart. YOu can never be so bold as to pick the bottom. Nonetheless, with 5 billion in sales, a 1% uptick in earnings or margins result in almost 50 million bucks, divided by 96 million shaers or so, and you are talkina bout a small change in margin have a huge difference in per share bottom line. I started buying this stock at 30ish, committing only about 20% of what I wanted in the company. At 24, I bought another 20 percentof what I want. Today I bought some more, about another 20%. As a bottom fisher, a value hunter looking for undervalued companies, you can rarely pick the bottom, nor the top on stocks. My point is that this is a well run, company in a continously growing industry. The introduction of new windows versions, 98 and nt 5.0 , plus small companies going to nt servers on wintel systems and the need for enterprise solutions, should maintain demand for the industry. WDC SEG and QNTM are all good companies that should outperform when pricing pressures moderate and inventory channels are cleared. Also note that this might never happen until a few companies go bankrupt, nonetheless, it is very positive that many of these companies have cut back in production, closed plants and are taking steps. REmember, it always gets worse before it gets better and always looks ugliest at the bottom. For those who have shorted it, KUDOS!, great call. For those who are buying it long, don't expect results tommorrow or by year's end, but over the next 16 to 24 months, these should be performerers. Regards, Steve