The following video is part of our "Motley Fool Conversations" series, in which analyst Rex Moore discusses topics across the investing world.
Today, Rex takes a look at Seagate Technology, which carries the lowest price-to-earnings multiple of all the stocks passing his "Best Values" screen.
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Report this Comment On July 19, 2012, at 9:54 PM, FoolSolo wrote:
Rexx, I don't think Seagate is nearly as compelling as Western Digital. I prefer WDC for several reasons, not the least of which is a healthier balance sheet.
Take a look at Seagates 5-year EPS growth... negative 7, and 5-year Sales growth... just 3.5%. Compare that to WDC at 12% and 17% respectively. And STX TTM earnings were down over 65%, much more that WDC which were down 48% (all due to Thai flodding). Sure, if you project forward from such dismal numbers STX had better raise their performance.
Compare Price to Book, Price to Cash and Price to Free Cash Flow, WDC is much better in all 3 categories. WDC also has a better debt/equity ratio.
From my analysis, I believe WDC has a much better risk/reward ratio than STX.
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