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

To: hcirteg who wrote (8368)	1/3/1998 10:28:00 AM
From: christopher d licata	Read Replies (2) \| Respond to of 11057

nice analysis! it looks like a corner has turned. any stock that loses 60% in a quarter(ugh!)is going to face tax loss selling as the year winds down, plus the portfolio idiots dump a stock so they dont have to explain their usual rotten logic. those 2 forces were a huge drag on wdc. the psr is .40,no debt, and a good case could be made that the asia problems are a net positive for wdc in the long run due to lower manu costs. a clear bottom has been made, and the big money may wake up and say,"hey,60%down in 3 months is enough of a punishment" and the recovery begins. throw in short covering and a nice nasdaq market in jan, and this stock has no place to go but up. where it ultimately goes to, well have to wait and see, but it has a lot of ground to make up, and resistance should be very light on the way up. good luck to all.

To: hcirteg who wrote (8368)	1/3/1998 10:33:00 AM
From: Jonathan Bird	Read Replies (3) \| Respond to of 11057

HC, I think perhaps I didn't make my point clear. I'm NOT saying the charts don't look good. I'm NOT saying we will not go higher short term. I'm NOT saying anyone who is long right now is a sucker. What I am saying is that we have not seen the REAL bottom yet, or the end to the woes of the sector. I am remembering what brought us this low in the first place. That is oversupply, and as a result, falling prices and margins. I haven't seen the slightest shred of evidence that things are stabilizing, nevermind getting better. What I am seeing on this thread, and the reason I posted, is people thinking that the sunny days are here again. Well there not. If I was simply seeing traders taking advantage of the January Effect then I wouldn't have posted at all. WDC is fairly valued at the 21-24 range where I expect it to hit in the next 4-6 weeks. I guess this is where we disagree mainly. Here my basic premise. Go over to bigcharts.com and look at the stock price relative to the rolling EPS over the past 5 yrs. Now match the current forward EPS estimate to the price on the chart. It hits around 10 dollars per share and less. On a historical basis, WDC is clearly overvalued. The chart clearly shows the next stop is the low 20's (without news). I don't disagree. But what if there is news(bad)? And whats the next stop after that? I think im looking farther down the road then you are. Now, if I were you (and the rest of you shorts), the last couple of days action would worry me. I covered my APM short on Dec 31 in full anticipation of this rally. So this actually has me pretty excited at the thought of being able to short again at a price with more potential so I can ride it down some more. So no worries. :) And im glad to see APM friends getting a break. I just hope they don't get greedy and miss their chance to bail out before it REALLY gets ugly. Jon Bird