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

To: rest42 who wrote (10143)	1/27/1999 7:55:00 PM
From: Stitch	Respond to of 11057

Bob; I had been talking about institutional holdings in WDC and an expectation that we would see divestiture of these positions as we near the 401K and pension fund roll over period. Here is an example: Wednesday January 27, 4:43 pm Eastern Time BLOCK TRADE - Western Digital 1,048,500 at 13-1/2, down 1-1/8, crossed by Goldman Sachs. I believe that we will see more of this selling. WDC broke through the resistance of the 200 day moving average today. Further the average earnings estimate is a loss of $3.11 for 1999 compared to a loss of $1.63 in 1998. WDC is estimated to record a profit of .63 in the year 2000. The stock in WDC has returned a mere 5.3 % over the last 12 months compared to the average return in the group (Computer Components), which has been 109.3%, and in the S+P which has been 26.8%. WDC has clearly lacked the energy both of the broad index and its industry specific group, lagging the latter by 10433 basis points and the former by 2153 basis points. It is important to understand that WDC is in an industry segment group called Computer Component Companies where street expectations are that performance will be considerably higher then the S+P this year and next. Estimates for this segment's profit growth are for 70.9% in 1999 and 36.3% in 2000, considerably more then profit growth expected in the S+P (+6.9% in 1999 and -18.77% in 2000). I believe all of this will not be overlooked by institutional investors as they take positions for the ensuing year. This is especially true as the company has announced a plkanned dilution. I will reiterate my price estimate of sub $10 within the next 45 days. Notions that a merger may salvage this valuation are flawed in that WDC has capacity that no one needs and very little leverage in its technology portfolio in comparison to its competition. Best, Stitch