3 Reasons to Sell Western Digital Today

• Report this Comment On July 30, 2010, at 12:26 PM, MegaEurope wrote:

  SSDs and enterprise systems are significant growth opportunities for WDC. Unlike WDC, STX does not make SSDs.

• Report this Comment On July 30, 2010, at 1:04 PM, FoolSolo wrote:

  Boy, since when do FOOLs follow the common Wall street herd mentality? WDC is undervalued if anything. Have you seen their cash flow, or their huge cash horde? SSDs and Flash drives aside, does anyone today expect to buy their next PC with a smaller disk drive? Does anyone think that people will store fewer music or home video files on their PCs in the future? Do you think fewer people will want DVRs to record movies and TV shows?

  SSDs are still too expensive and too limited to replace hard drives. I work in technology and very few people I know are buying them. Those that are buying them are buying them to replace the numerous little thumb drives they have laying around, not their hard drives. If your business is like most businesses in the world, you are digitizing more and more information, and very few people ever delete or compress their data. Find me a company that is not storing more and more business information, or mining their vast data stores for business intelligence. And how many of you reading this are not collecting digital music and HD video files? Oh sure, you copy the files to portable devices to take them on the road, but do you ever delete them from your round, brown and spinning platters? I don't think so.

  SSD is going to grow, and I believe WDC is positioning themselves to get a good slice of this technology also. I believe WDC is aware they are in the "storage" business, not just the hard disk business, so I don't believe they are taking the right steps to adjust accordingly.

  The less savvy panic stricken public can sell their WDC stock. I love it, I can pick up more shares at an even greater discount.

• Report this Comment On August 01, 2010, at 9:28 PM, econvp wrote:

  megaeurope - STX does make solid state drives as well as hybrid drives.

• Report this Comment On August 02, 2010, at 11:01 PM, MegaEurope wrote:

  My mistake, the last time I checked Seagate's website I could not find them. I'll have to research a bit more.

• Report this Comment On August 07, 2010, at 8:51 PM, Glycomix wrote:

  The Hard disk Drive maker Western Digital isn't sexy, but it is profitable:

  WDC is cheap 4.41 price/earnings right now; It has 4.98 free cash flow.

  Western Digital has a productive management with 21% Return on Assets and a 35% return on equity. It's profit margin in is a respectable 14.35%.

  The data say that its fiscal future looks bright: Projected Earnings Growth is 0.45. Earnings per share increased 45.69 over the past five years. In other words demand is going up and they're making money on it.

  It's safe. Its net income has been positive for the past 10 years excepting only 2001 when the tech-stock bubble burst.

  Its only downside is that WDC doesn't pay a dividend.

  Wall Street discount disk drive makers because they see the convenience and recent cost/effectiveness jumps in solid state memory.

  That's a ditsy assessment. Solid state memory is still expensive: 10 to 20 times more expensive per megabyte than Hard Disk drives.

  Hard Disk drives are still essential for BACKUP (as in wireless home backup systems) and to ensure adequate computer power. That's not going to change for the next 5 to 10 years.

  What other threat is there? The internet? Internet backup is slow, irregular,and insecure. With its current security problems, it's insane to depend upon the web for anything except information and purchasing.

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