4-Star Stocks Poised to Pop: Western Digital

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, disk drive specialist Western Digital (Nasdaq: WDC  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Western Digital's business and see what CAPS investors are saying about the stock right now.

Western Digital facts

Headquarters (founded) Irvine, Calif. (1970)
Market Cap $9.4 billion
Industry Computer storage and peripherals
Trailing-12-Month Revenue $12.5 billion
Management CEO John Coyne (since 2007)
CFO Wolfgang Nickl (since 2010)
Return on Equity (average, past 3 years) 24.6%
Cash / Debt $3.2 billion / $2.2 billion
Dividend Yield 2.6%
Competitors EMC
Seagate Technology
Toshiba

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 1,367 members who have rated Western Digital believe the stock will outperform the S&P 500 going forward.

A few months ago, one of those bulls, Murkyl, kindly addressed some of the concerns surrounding Western Digital:

[A] lot of talk about solid state drives overtaking hard disk storage. ... What some people don't get is that even with tablets and the cloud, hard disk usage actually goes up. All that cloud storage has to go somewhere and hard disks are still the only viable cost effective solution and barring any radical breakthrough, will continue to be so for at least 5-10 years. ... Another point about hard disks is that even with lower unit counts to the PC space, what matters a lot [is] the enterprise space where disk margins are much better. ... I believe the purchase of Hitachi's disk division was a brilliant move that will help [Western Digital's] margins in the coming quarters.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Western Digital may not be your top choice.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Western Digital and EMC. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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