The first half of 2012 is in the rearview mirror, and investors are gearing up for what looks to be an action-packed ending. There are bound to be some big winners -- and more than a few duds -- no matter what happens in the United States and abroad.
Will your favorite stock have its victory lap as we hit the home stretch, or will it get lapped? First-half performances can hold some clues, so let's look to the recent past to find out whether Western Digital
For much of 2012, Western Digital was a highflier. Its stock hasn't been the same since the end of April, as you can see here:
WDC Total Return Price data by YCharts
We'll look at why Western Digital dropped in just a moment, but first let's take a look at a few financial snapshots of its recent performance:
|Market Cap||$7.9 billion|
|Trailing 12-Month Revenue||$10.13 billion|
|TTM Net Income||$1.03 billion|
|TTM Free Cash Flow||$1.84 billion|
|Most Recent Quarterly Revenue||$3.04 billion|
|MRQ Net Income||$483 million|
|MRQ Free Cash Flow||$1.55 billion|
|MRQ Revenue / Net Income YOY Change||34.8% / 230.8%|
|P/E and Forward P/E||7.2 / 3.7|
|Motley Fool CAPS Rating (out of 5)||**** ( find out more by clicking here )|
What the numbers don't tell you
Western Digital and Seagate
The two companies diverge at this critical event, though, and that might help explain why Seagate's stock is up 55% since January while Western Digital is flat for the year to date. Sure, Western Digital trounced weak expectations with its January earnings report. But since supplies were crimped, Western Digital could afford to jack up prices on its existing hard disk drive stocks, juicing profit in a big way. Once the company announced it had gotten past the tough times of short supplies, investors fled out of fear that those tasty margins would soon evaporate.
The subsequent sell-off brings us to the present day, with Western Digital down more than 40% from its high point. Seagate is down as well -- but since its high point represented a doubling from the start of the year, it could afford to give back a bit more.
How will Western Digital bounce back? Can it bounce back? Super-investor David Einhorn seems to favor Seagate, having increased his already sizable stake last month. The hard disk drive industry is fully mature, and investors can look to major computer manufacturers Hewlett-Packard
HPQ Revenues TTM data by YCharts
Meanwhile, the lucrative server market has begun shifting toward faster solid-state memory. Fusion-io
Western Digital might be a leader in high-tech manufacturing, but it's looking like yesterday's stock. Find out which stocks are your best bets for tomorrow in The Motley Fool's most popular free report on next-generation manufacturing. We call them "3 Stocks to Own for the New Industrial Revolution," and we think they deserve a place in your portfolio today. Find out more -- reserve your copy of this important report now.
The Motley Fool owns shares of Western Digital, Facebook, Cisco Systems, and Fusion-io. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.