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Friday, January 27, 2006

Seagate and Hard Drive Sector

Check out Seagate's (STX) 3-month graph. It's so nice and beautiful, similar to Apple's last year. STX up 57 cents today, and went up another 40 cents after-markets. Look at Maxtor's (MXO) 3-month graph. Two months ago it was sub-$4. Today, it's up 250%. But the biggest surprise is Western Digital (WDC). They're up 85 cents today and another $1.86 after-markets. They beat earnings by 9 cents -- meaning they did 24% better than the expected 38 cents. Two months ago I said the hard drive industry is going to make a major come-back soon and Seagate is a good bet. Looking at the graph, $30 looks like the next stop. I'm going to accept $20 is gone and have to buy at these prices before these prices go away too. Here are some notes based on my research. Seagate (STX) Forward P/E 12 (very low compared to tech sector) Expected Growth: 12.5% per year for the next 5 years 12.5% Profit Margin 8.54B in Revenue 1.75B cash on hand $3.6 cash per share Low debt Pays Dividend (Not many tech companies pay dividends) Top Brand Recognition Vertical Storage Technology - allows HD size over 100 gigabits per square inch, eventually 1-TeraByte HD on a single 3-inch disc Super high demand in the storage sector now as shown in STX, MXO and WDC in this past month.

2 Comments:

At 2/04/2006 12:38:00 AM, Blogger Michael Patzer said...

What do you think of Komag, the big hard drive supplier?

 
At 2/08/2006 03:42:00 PM, Blogger Smarty said...

Looks good. It should be a sign that Seagate is going benefit from this harddrive demand.

 

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