Sam, I admire your strong stance, but at what point do you throw in the towel that this is a commodity type DRAM business? Margins are never predictable, yet you defend this company at all costs. This is exactly why this company has a PE that is in the single digits and will stay that way. Terrible business to be in, in my opinion and when supply/demand gets out of balance, it takes many quarters to make up the margin hit. This industry must consolidate the players, otherwise you will continue to see this downhill slide, imo.
I've already said pretty much everything I have to say about this. At least, until I hear more details about the supply-demand situation, which probably won't be happening until the CC in a few weeks. The fact that the company has a strong balance sheet and a very low PE should limit the damage to the stock price until then.
But as far as more consolidation goes--IMHO, the piece I posted from Intel implies that there will be an enormous need for SSDs over the next few years. The current NAND capacity--even including Samsung's just announced fab in China--won't meet the need if those projections are close to the mark. As for being like DRAM--I dispute that as well. NAND requires very smart controllers in order to be reliable, durable and cost effective. And the controllers aren't simple commodities. And they are an essential part of the chip, without which it is just a useless piece of silicon.
Two great years...to get back to where it was two years ago. Forgive me if I remain unimpressed.
If Q4 guidance put the stock in the penalty box for a minor infraction, this is a major penalty.
Earnings estimates will come down to $3.65-$3.75 for 2012 (I won't be surprised if the bears are under $3.00) . Slap a 10-12x PE on that and you've got a $36-$45 stock.
$45 is now the TOP of the range IMHO.
No one in their right mind is going to step up here and buy this POS given how weak its business is and how overbought the market is.
I'll take a shot at the $42-$43 level for a quick trade off long term support. But I expect that to break. $37 is where buyers feel comfortable buying. And I have no doubt we'll get there in the coming weeks/months.
Clean, I think you have the right plan for this commodity. Though I think the $37/38 area is attractive, BUT only for a trade. This is not a stock anybody should hold, and for good reason. I believe this is the same type of stock as Micron, and that equals bad.
SanDisk sell a whole bunch of embedded chips, surprised you don't know that. Also embedded, or no card slot is also a benefit to the overall NAND demand. When the device is replaced for whatever reason, the new device comes with a new 32GB chip, or whatever capacity, rather than the owner just moving the 32GB card from the old to the new device.
However, clearly SanDisk needs to sell more to the mobile device leaders, which are currently Samsung and Apple. Yes Samsung do produce their own NAND, but SanDisk does have some wins there, but they need more.