There's no doubt that SanDisk (Nasdaq: SNDK) is living the high life right now. Last week's second-quarter report drove the stock to better than 10% overnight gains by way of 17% year-over-year sales growth and 5.6% higher earnings. That may not sound like much, but the Street had expected net income to shrink rather than expand.

So how did SanDisk pull off a trick like that?

For starters, SanDisk is big in mobile computing. Mobile customers produced 57% of the company's sales this quarter, through an unspecified mix of tablet and smartphone builders. Tablets known to include SanDisk solid-state drives at least occasionally include the Hewlett-Packard (NYSE: HPQ) TouchPad and the Research In Motion (Nasdaq: RIMM) PlayBook. You may also have heard of Android tablets such as the Samsung Galaxy Tab and Toshiba Thrive -- both shipping with SanDisk storage systems inside.

In fact, the only tablet maker I haven't seen using SanDisk storage is market leader Apple (Nasdaq: AAPL). But iPad and iPhone sales still help SanDisk indirectly as their sales bolster demand for memory chips, in turn keeping SanDisk's selling prices more stable.

The company is also dipping its toes into the market for business-class SSD systems with the acquisition of Pliant Technology. This is a new market for SanDisk, and Pliant is now known as SanDisk's Enterprise Storage Solutions division.

As nice as all of this sounds, SanDisk shares haven't exactly set the world on fire recently. The stock has trailed the S&P 500 benchmark over the past year and trades for a measly 8.4 times trailing earnings.

Yet it's a respectable four-star stock (out of five) in Motley Fool CAPS, our free investing community, and fellow Fool Rich Smith is such a believer in this deep value that he's bought some shares. Personally, I'm more partial to the faster revenue growth and wider addressable market of memory-chip generalist Micron Technology (Nasdaq: MU), of which I own a few shares, but it's still really hard to argue against the pent-up value stored in SanDisk.

Will this compressed stock make good on its promises in the second half of 2011 or perhaps in 2012? Only time will tell, but you can sniff out early signs of a big move by keeping close tabs on SanDisk news. Just click here to add the stock to your Foolish watchlist, and you'll be well on your way.

Fool contributor Anders Bylund owns shares of Micron Technology, but he holds no other position in any company mentioned. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in 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. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.