As expected, Western Digital (NYSE: WDC) has reported a fourth quarter with higher unit sales than arch-nemesis Seagate (Nasdaq: STX), but also lower revenue. This is how it's going to be for a while. Let's put the latest quarterly results into some perspective:


Western Digital



$2.4 billion

$2.7 billion

Unit sales

49.7 million

46.8 million

Average selling price









Source: Posted earnings reports.

When Seagate reported a couple of days ago, I told you that I preferred that stock over Western Digital; Seagate is stronger in the enterprise computing market, which is still heating up even as consumers start to tighten their belts. This plays out in the unit price difference, and I stand by that statement.

However, you can't go wrong with either of these ultra-value stocks. Both Seagate and Western Digital are handsomely profitable and still growing; they have much of their end-user marketing taken care of by system-builders such as Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ); and oh my word, did you see the P/E  ratios?

I mean, mid-single-digit P/E figures are often reserved for stocks with either no growth prospects, or some serious distress and risk. BP (NYSE: BP) would be one good example of both categories; it trades for 5.7 times trailing earnings in a very mature industry, amid the biggest business-altering disaster in the company's history. If you’ve been looking to cash in on BP's precipitous decline, there might be even better values in other sectors.

These hard drive makers -- neither distressed nor stalled -- are arguably cheaper than the Great Green Devil. I don't think that's fair, even if Western Digital sees product demand softening more than it had hoped. The funny part is that both stocks may fall even further before the inevitable climb back to reasonable valuations can begin. Next quarter won't necessarily be pretty. If you want to wait for a deeper discount, go right ahead. You'll probably get it.

But the sector is cheap enough that you won't regret picking up some shares at today's prices, either. I'm taking the intermediate step of hopping over to CAPS to give both Seagate and Western Digital thumbs-up ratings, and I expect them to defend my all-star status over the next couple of years. They can help you, too, if you follow along.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.