Why SanDisk Corporation Shares Could Spike to $125

Does this analyst make a good case? Or is it just more noise from Wall Street?

Jun 11, 2014 at 11:19AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of SanDisk Corporation (NASDAQ:SNDK) rallied 2% today after Bank of America upgraded the data-storage specialist from underperform to buy.

So what: Along with the two-notch upgrade, analyst Simon Dong-je Woo boosted his price target to $125 from $80, representing about 29% worth of upside to yesterday's close. While contrarian traders might be turned off by SanDisk's sharp climb during the past year, Dong-je Woo's call could reflect a sense on Wall Street that favorable industry trends give the stock plenty of room to run.

Now what: B of A raised its 2014 EPS view for SanDisk from $5.09 to $5.52 in 2014, from $4.95 to $6.74 in 2015, and from $4.73 to $7.52 in 2016. "Management's firm commitment to shareholder return (dividend/buyback using most of FCF) and mix improvement (more value-added products such as enterprise SSD) should warrant high multiples," said Dong-je Woo. "Low threat from competitors (chip supply constraint, disciplined capex) & new demand (China, B2B data storage, etc.) should lead to lower cyclical risk (WACC decrease) and more stable ASP (margin upside even at normal level of cost cut using new tech)." With SanDisk shares now up more than 85% from their 52-week lows, and trading at a P/E of 20, however, I'd hold out for a wider margin of safety before betting too heavily on that upbeat outlook. 

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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 Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

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Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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