Sometimes, Mr. Market acts like a senile old grandpa. No matter how many times you tell him that changes are coming, or how far in advance, he'll still reach for his personal defibrillator when the long-expected news actually happens.
That is the case with solid-state storage expert STEC
Without EMC's order inflow, STEC's sales dropped 39% year-over-year to $38.8 million. $0.11 of GAAP losses per diluted share look terrible next to the $0.07 net profit per share seen a year ago. Hardware distribution agreements with IBM
So does that mean that the market for STEC's solid-state drives is dead, done for, pining for the fjords? Not hardly.
Solid-state storage is much faster than the traditional hard drive model of spinning magnetic discs. Solid-state also draws less power and is impervious to many kinds of physical jostling that would destroy an old-school hard drive. But it's also much more expensive, and the recent memory chip price war between global memory giants like Micron Technology
So the market is taking a breather while drive makers like STEC and SMART Modular Technologies
And I think that STEC will make it through this trough to enjoy the good times at the end of it all. The losses are reasonably small even when EMC is absent, and STEC's sterling, debt-free balance sheet is enough to patch over some rough spots.
I'm heading over to CAPS to give STEC an "outperform" rating for the next year or so, in order to take advantage of the currently depressed share price. You're welcome to cast your own vote on STEC -- or any of the other 5,000 stocks in the CAPS system.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool owns shares of and has written puts on Oracle. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.