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

To: InfoMiner who wrote (10081)	1/19/1999 4:56:00 AM
From: Stitch	Respond to of 11057

Bradley, <<Since I haven't heard too much about layoffs or plant closings I am hopeful.>> I thought since you specifically mentioned it I would bring your attention to the following: biz.yahoo.com But here is a counterpoint for you. That you haven't heard too much, (until now) about closings at WD is exactly a reason to worry IMHO. I like very much the trimming and streamlining that Seagate has done for example. Their increase in margins suggest they are running at a much improved efficiency. Lets look at inventory as an example. Based on the last 4 reports from SEG, inventory as a percentage of revenue went from 45% to 22%. WDC's last 3 reports suggest their inventory ratio has gone from 29% to 25%. SEG had 13.4 turns in the quarter compared to 7.8 in the same period last year. In the next WDC report I think we should look closely at this number. (Thanks to TBowl for providing the charts on this.) So maybe we can't compare them because SEG is a vertical integrator? Exactly, just think about it. SEG should be handicapped in this one comparison by virtue of their model. WDC, by virtue of their "virtual" model should have done a lot better IMO. The rest of my arguments have to do with the sector in general which is still seeing too much capacity and will still find profits to be very elusive IMO. Seagate has software holdings, tape drives,high end market share, a relationship with EMC, and 2.2 billion in the bank. Seems to me that SEG is in a position to weather the continued battle in this sector. I just do not see WDC well armed for it. I have concentrated my remarks on SEG as a comparison but could argue effectively in comparing WDC to IBM, Fujitsu, and Quantum as well I believe. Best, Stitch