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Technology Stocks : Western Digital (WDC)
WDC 46.30-2.7%3:59 PM EDT

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From: Carey Thompson5/20/2007 1:03:52 PM
   of 11057
Death of disk-drive business unfounded: Barron's
Sunday May 13, 2007 12:50 pm ET

NEW YORK (Reuters) - Reports of the disk-drive business' demise have been greatly exaggerated, according to a report in Barron's.
Since the beginning of the year, the No. 1 and No. 2 drive makers -- Seagate Technology (NYSE:STX - News) and Western Digital (NYSE:WDC - News) -- have seen their stocks decline on worries that personal-computer sales are slowing substantially, Barron's noted in its May 14 edition.

Some analysts have even suggested that the newer kind of computer chip known as "flash" memory could completely replace drives in personal computers -- and put Western and Seagate out of business, Barron's said.

But PC sales are doing just fine, and flash -- in great part owing to its cost -- is not going to replace disk drives globally for years to come, Barron's said.

Once investors come to appreciate those facts, Western Digital shares could appreciate another 20 percent or more from a recent price of $18.10 per share, Barron's said.

Western is cheaper than Seagate by a wide margin, trading at a two-year-low price-to-earnings multiple of about 9.4 times the next four quarters' estimated profit per share -- below its five-year median of 11.6 times, while Seagate is near its median of 12.2 times.
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