Why SanDisk Corporation Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of flash-memory chip specialist SanDisk Corporation (NASDAQ: SNDK  ) popped 10% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock had pulled back over the past few weeks on valuation concerns, but yesterday's Q1 results -- earnings soared 62% on a revenue increase of 13% -- and upbeat outlook are quickly easing those worries. In fact, solid-state drive sales -- accounting for about 30% of its business -- spiked 61% over the year-ago period while gross margin expanded to a record 49.7%, giving analysts plenty of good vibes over its product positioning going forward.

Now what: Management now sees current-quarter revenue of $1.550 billion-$1.625 billion, versus the average analyst estimate of $1.583 billion. "We are excited by the momentum we are building in our business as we continue to execute on our growth initiatives," said Sanjay Mehrotra. More importantly, with SanDisk still sporting a solid balance sheet and reasonable PEG of around 1, the downside might be limited enough to bet those prospects.

More compelling long-term opportunities
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal "The Motley Fool's 3 Stocks to Own Forever." These picks are free today! Just click here now to uncover the three companies we love. 


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2919318, ~/Articles/ArticleHandler.aspx, 11/23/2014 8:51:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement