Amvona

*May The Lord rest the souls of those who have departed in the destruction caused by Hurricane Sandy, and console their loved ones.

 

MBAsOn October 22nd, 2012 Western Digital Corp. released their Q1 2013 financial results.  Here are a few key points that are worth noting:

 

Valuation Ratios:  The cheapest Company in America?

 

"Citigroup‘s Joe Yoo today cut his ratings on hard drive and storage technology developers Seagate Technology (STX) and Western Digital (WDC) to Sell from Buy, writing that there is a chance of 25% downside to current estimates for the companies this quarter given what may be drastically lower volume of drive shipments.  Yoo cut his Seagate target to $25 from $37, and cut his Western Digital target to $32 from $53. …For Western, his estimates go to $15.3 billion and $9.99 in EPS from a prior $15.84 billion and $10.68 per share."

STX, WDC Cut to Sell at Citi; Estimates Too High Amidst PC Slowdown (Tech Trader Daily, Oct. 12th, 2012)

Published in Finding Alpha

Shares of Western Digital (WDC) were sold for investors accounts on August 13th, 2012 at $44.  As of close of market on Friday Oct. 19th, the shares were being traded for a mere 34.88.  A decline of a full $9.12 or almost 21% in barely 9 weeks.  Is the value of the company really less than it was, when the shares recently traded at $44?

 

wdc chart 10-22-2012

Published in Finding Alpha

Spencer Platt/Getty ImagesOn May 17th around 2 p.m. a call came in from a friend, he said he had just received a call from his broker, who asked him “what he wanted to do about Facebook’s IPO”.    The response was intricate and subtle;

 

“wouldn't touch it with a hundred foot pole”

 

The advice was to consider buying Western Digital (WDC) instead if he had to buy something.    Sensing that the answer may have been a bit curt, the following email was sent shortly after the phone call:

Published in Finding Alpha
DSM_IV_2Probably because of some yet-to-be-diagnosed neurosis our idea of a “good time” is listening to replays of company conference calls - the company’s that we own for investor accounts are a lot of fun, but our real interest is their competitors.

Recently when listening to the Q3 2012 CC for Seagate Technologies (at about 9 min and 35 sec. into the call), we stumbled across an interesting piece of information - Seagate indicated that the TAM (Total Addressable Market) in the March QTR was about 143 M units, which was above both the industry analyst and the company’s own expectations of 130-135 M units, mentioned by the company in their January CC. 
Published in Finding Alpha
Halki
 
The bones of an article
 
On November 16th, 2011 there just wasn’t enough time to do everything – something had to give.  We were packing our bags for our trip to Istanbul, we had to be at the airport by 6:30 p.m., we were making last minute preparations, scribbling out notes for an article on Western Digital and stuffing investors accounts with their shares as fast as we could.  After listening to their Q1 2012 CC call twice [and then STX’s] and having read all of their 10Q’sand annual reports for over a year we were more convinced now than ever that WDC had by far the superior management team, and with a confirmation of full insurance coverage including business continuity (that is to say lost income) after the floods in Thailand, there was no doubt left in what we were doing with investors money.
 
 
Although we only needed the typical hour to knock off the article, it just wasn’t in the cards.   By 2:30 p.m., amidst a flurry of phone calls and emails, we gave up on the idea that the article could be published that day, having scribbled out only the framework of an article.
 
Published in Finding Alpha

stock_marketOn August 11th, 2010 we acquired shares of Western Digital Corp. for others accounts at $24.15 a share in the midst of tremendous pessimism about the storage industry.  On September 17th, 2010 we outlined a few simple views that brought about this decision and published our article “640K ought to be enough for anybody…” WDC vs. STX (we used prices as of Sept. 10th, 2010 for the purposes of the article, although the shares were actually purchased on August 11th, as noted in the article itself in reference to “early August”).  On October 1st, 2010 Seekingalpha also published the article here.

Published in Finding Alpha

“640K ought to be enough for anybody…”            

Recently the hard drive crashed on one of our home computers, suddenly and without cause.  When we took it apart to replace the hard drive, we discovered it was a Seagate SATA 500GB / 7200 RPM.  It was a good opportunity to upgrade the operating system, and install a larger drive… perhaps 1TB.  About a year ago when the machine was purchased, 500GB still seemed large, now it seemed small and inadequate, particularly for storing our large and growing collection of home videos.  Cost to replace (without price shopping): $49.00.

Published in Finding Alpha

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