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   Technology StocksWestern Digital (WDC)


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To: Sarmad Y. Hermiz who wrote (11023)5/16/2008 3:06:47 PM
From: Sam Citron
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Thanks, Sarmad. I knew you would be all over this. I also have a feeling STX should be playing catch-up and have been buying lately.

Do you have a sense of where these companies can profitably deploy their extra cash, other than share repurchases?

Sam

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To: Sam Citron who wrote (11024)5/16/2008 3:37:59 PM
From: Sarmad Y. Hermiz
   of 11057
 
>> Do you have a sense of where these companies can profitably deploy their extra cash, other than share repurchases?

That's a problem, isn't it ? Their product field is so narrow. Though at this time it is growing. I have mentioned this before. Intel has estimated that the amount of data that will be stored on-line is expected to grow 10-fold in five years. So there is a lot of growth still ahead. But eventually, these companies will have to expand into other areas.

I don't know the answer. And it is one reason I am thinking of my seagate position as a trade instead of a long-term hold.

I really think companies such as EMC and Seagate should merge. That would be a natural fit, and it would be beneficial vertical integration. But so far, no one has done any storage acquisitions.

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To: Sarmad Y. Hermiz who wrote (11025)5/16/2008 5:39:43 PM
From: Sam Citron
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EMC just recently purchased Iomega. Does that provide them with the vertical integration they need, or would STX still be a nice complement?

I would like to see the HDD makers innovate their way out of the dilemma by coming up with new product categories that use their disk drives. I thought WDC's My DVR plugging into a Tivo or Direct TV DVR's USB port to extend storage capacity was a clever idea. Something a bit more radical might be an EyePod, for example. This would be a removable drive that I carry around with me connected not to a headphone for listening to music, but a portable head mounted display unit for reading text when it is not convenient for me to be at my laptop. I tend to download lots of information during the day but rarely do I get the time to do more than a quick skim of the material. If I had an EyePod, I could read such info while exercising, commuting via bus or subway, etc. Perhaps this is too Jetson-like...

Sam

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To: Sarmad Y. Hermiz who wrote (11025)5/17/2008 6:57:17 AM
From: Pigboy
   of 11057
 
<< I really think companies such as EMC and Seagate should merge. That would be a natural fit, and it would be beneficial vertical integration. But so far, no one has done any storage acquisitions. >>

I disagree. I believe EMC wants to be more about software where the gross margins are higher. Seagate is more about hardware. Always will be imo. STX is in more of a commodity biz and their GMs are half that of EMCs. I've believed for years that EMC should eventually merge with CSCO (who also wants to be more about their software running networks and has even higher GMs than EMC). It seems to me that the LAN and WAN and SAN is all eventually converging anyways (the technologies such as FC and Ethernet are already overlapping). Probably a naive viewpoint but I still have it nonetheless. ;)

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To: Pigboy who wrote (11027)5/17/2008 10:47:37 AM
From: Sarmad Y. Hermiz
   of 11057
 
>> Probably a naive viewpoint but I still have it nonetheless. ;)

Actually, after reading your post, I think I had the naive view point. Perhaps you are right, and EMC will not want to be saddled with owning a lower margin hardware business. They can just buy the hardware.

My point was more for Seagate, and that they need to look past the era of rotating magnetic platters for storage. Seagate had a very strong and thriving software backup business that they spun off about 10 years ago. I think hard drive companies will not survive unless they evolve to other forms of storage hardware, such as solid state memory.

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To: Sarmad Y. Hermiz who wrote (11028)5/17/2008 2:09:18 PM
From: go_gatrz
   of 11057
 
Hello Sy! (I know - your name isn't Sy, but you were on Yahoo and old habits are hard to break).

Long time no hear from you.

Back into the HDD stocks now? I never really left them, and over the last year, WDC, to borrow a phrase, has been "berry berry guud tu me!" Not for the faint of heart (as you stated), and the forest lies deep with rats, skunks, snakes ..... and sharks (land shark!!!!).

I still chase the windmills, but somebody has to do it.

Like you, but not the same time as you, I also jumped into INTC when it broke 20 (going down). Sold out last summer at 25 and put it back into WDC. Never got back into INTC. The WDC story has just been too compelling.

Here we are on the WDC board talking about STX (I also have a position in STX - not doing near as well as WDC). The SI boards used to be the place to be back before 2000, but they have been really quiet for awhile in HDD land. Interesting to see a name I recognize.

Hope you have been doing well. And wish the same for your future.

I'll be around.

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To: go_gatrz who wrote (11029)5/17/2008 3:25:07 PM
From: Sarmad Y. Hermiz
   of 11057
 
gatrz, what a nice surprise. I occasionally look for you on yahoo WDC board, but it is just too polluted with idiots there.

So do think WDC has more up side in the share price ? I always thought Seagate is the better company, especially if I can buy the shares at a big discount to wdc. My assumption is Seagate's enterprise server business is much more protected from both price competition, and from encroachment from solid state. Apparently the market does not see it this way.

I'm glad you are doing well, and wish you continued success. I'll look foreward to reading your posts. Were you in the computer hardware selling business ? Are you still in that ?

Sarmad

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To: Sarmad Y. Hermiz who wrote (11030)5/18/2008 1:55:43 PM
From: go_gatrz
   of 11057
 
No changes in what I do: still a reseller (services & hardware). Still work 7-6 most days.

Do I think WDC still has more upside? Since I still own it, yes. But since you've taken up STX again, ask yourself why did you buy STX? If you are like me, its because you see it as undervalued. And if you compare STX EPS to WDC EPS and their respective multiples, you will find they are today still equally undervalued. So if there is valuation logic behind buying STX, the same will apply to WDC.

But it would be foolish to ignore the fact that WDC is now trading at 10-yr highs. Let's ignore for the moment that EPS are at historic records (not just 10-yr). Being at these highs makes it susceptible to greater manipulation - and price swings. Thus, I sold off some newly acquired shares on Friday. But I still have plenty left (some from when you left).

As for what do I see for STX & WDC?

As for STX, I recently posted some viewpoints on the Yahoo STX board. The links are provided below - I'm not sure SI will allow them.

Seagate has some issues to work through, and I can't tell you how it will work out - yet. They have been somewhat of a puzzle to me. Your assumption about STX's enterprise business may not be all clear. There are some near-term challenges - from SSD, competitors, themselves - and WDC is on the horizon. Watch for something from WDC in the next qtr. I don't see a demise for STX, but it will not be as easy going forward as it has been for the last 2 years.

As for WDC, they are hitting on every cylinder plus a few. They got whacked after the last CC, but that was pure BS just like all the other times. The sharks never rest. That pothole has already been erased by a wide margin. They still have margin gains to come from Komag, the notebook business is surging beyond expectations, and they now have the areal density leadership in both 2.5" & 3.5". The world has been turned upside down, Capt. Jack Swallow!

So what do I think is coming next? First, I don't think business was or is as bad as many of the ANALysts wanted to make it sound. Also, maybe - just maybe - the elephants are coming to the realization that the storage sector IS HOT and that there is plenty of money to be made. And that is more true in HDD than any other segment. If so, then valuations should rise from their pathetic 8.5x to at least something over 10x. Heaven forbid we should ever see just plain old average tech multiples of 15x.

This is where I think the next stock price increase is going to come from - a valuation increase. The sharks will justify it simply because they can. If so, then both STX & WDC will benefit.

__________________________
Links for STX:
messages.finance.yahoo.com

messages.finance.yahoo.com

messages.finance.yahoo.com

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To: go_gatrz who wrote (11031)7/23/2010 1:54:05 PM
From: Brazilian Investor
   of 11057
 
As for WDC, they are hitting on every cylinder plus a few. They got whacked after the last CC, but that was pure BS just like all the other times. The sharks never rest. That pothole has already been erased by a wide margin. They still have margin gains to come from Komag, the notebook business is surging beyond expectations, and they now have the areal density leadership in both 2.5" & 3.5". The world has been turned upside down, Capt. Jack Swallow!

I couldn't agree more with you. I read your posts on the Yahoo board but the level of the comments there is unbelievably low. I just got into WDC this week by adding positions at both $31.05 and $28.7 and I don't regret it.

WDC's reputation is not stained, unlike Seagate or Hitachi. To prove my point? What is the best rated HDD manufacturer of internal and external hard drives? Western Digital.

So what do I think is coming next? First, I don't think business was or is as bad as many of the ANALysts wanted to make it sound. Also, maybe - just maybe - the elephants are coming to the realization that the storage sector IS HOT and that there is plenty of money to be made. And that is more true in HDD than any other segment. If so, then valuations should rise from their pathetic 8.5x to at least something over 10x. Heaven forbid we should ever see just plain old average tech multiples of 15x.

The world is in an increasing demand for more storage. Even if analysts were to say the future is in solid state media, there is still a lot to happen for them to reach the high storage density and low price point of regular hard drives.

Some analysts are saying that the regular hard drive business is dead due to devices like the Apple iPad coming into play and the usage of cloud computing, which IMO further re-iterates my previous point about high density and low cost.

I think that right now that my predictions, or anyone else's for that matter, is purely speculation based on human psychiatric patterns and not on actual financial statistics. Because if the latter was the case, I wouldn't be seeing WDC hit a 52-week low today.

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To: Brazilian Investor who wrote (11032)7/23/2010 2:36:28 PM
From: Cheeky Kid
   of 11057
 
Samsung is a big player in the HDD market too. I don't know what the best drive is, they are all prone to failure. Anything with that many moving parts is going to die one day. Over the past 25 years I had 8 hard drives fail on me, all brands.

Hard Drives
reviews.cnet.com

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