What he said is valid. However, he missed an important point. For the past 5 years, HDD capacity in clients has basically stayed the same. This will change as 4k video becomes more prevalent. Remember the famous comments from the CEO a few years back? He said people buy his products to watch porn. So while I don't see HDD has much chance to grow in enterprises or even in consumer's laptop, it may see a stronger demand from consumer's desktop, and more significantly, from home NAS.
Below is an excerpt form an article on Seeking Alpha written today by Jason Kaplan. He paints a very negative picture of Seagate's future. If anyone has read it I would appreciate comments. I do not agree with him but there are definitely some points he makes that are hard to argue with.
"To sum up, Seagate is on a path to obsolesce. There may be glimmers of hope along the way, but the stock should be sold on any rally. If the dollar weakens significantly vs. other major currencies, I can see that being good for PC sales as most of the components and operating system are priced in dollars. However, flash penetration will continue in the client space, particularly in laptops as the performance benefits are very meaningful. Eventually flash will come for enterprise near-line applications. It's already penetrating mission critical applications. HDDs will be left with just the budget (surveillance, DVRs, gaming systems, etc.) and cold storage applications. That won't be enough to support the current capital structure at Seagate."
If you have some knowledge that backs up your predictions please either share them or suffer in silence. Doubtful that you are suffering or even hold any shares.
Yes he has a long history of timing his purchases. But he also knows how wall street thinks. So I always will use this data point with caution
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The last time Luczo made significant open market purchases was a very clear bottom - around $4.
It is rare to see open market purchases.
Pardon the correction but...I think that's spelled "comedy." ' )
I haven't checked STX ownership lists for quite a while, but what interests me is how Luczo used to cash out all his salary shares pretty quickly, even when STX was buying in shares at a furious pace. The fact that he's now accumulating is certainly a change in direction. GLTA
Excerpt from Insider Trading New, Feb 3rd
Let’s start off with Seagate Technology PLC (NASDAQ:STX), which had not seen any insider buying since the end of 2013 until this week. To begin with, Philip G. Brace, President of Cloud Systems and Electronics Solutions, snapped up 5,000 shares on Tuesday at a price of $29.1 per share and lifted his stake to 14,930 shares. Moreover, Chairman and Chief Executive Officer Stephen J. Luczo bought 200,000 shares on the same day at prices ranging from $28.28 to $30.79 per share, all of which are held via a trust fund called Stephen J. Luczo Revocable Trust. After the recent purchase, the CEO’s trust fund holds a stake of 1.63 million shares.
Seems like Luzco has some confidence in this comany.
I find it quaintly characteristic of our board that: I read this morning that STX is being sued for selling poor drives (maybe old news, but what I read was posted yesterday after the close); yet Seagate is just about the only thing holding up the entire portfolio in a sea of red this morning - and the only posts on our board are dealing with the terrors of spam. Something perhaps a little dysfunctional but nevertheless amusing about it. GLTA
Thanks defunct. My guess is that there must be a mechanism that provides proof that their post has been read. Other than a reply or a thumb not sure how they get paid. It is possible, I guess, that simply posting may be proof enough for payment. In that event I also remain uncertain..
A counter thought: I have read spam posts that seem to want to avoid the thumbsdown - comments to the effect that "I'm not one of those spammers you want to red thumb - I'm just trying to pass along something fantastic!" And although I don't see a lot of these posts, the fact that I see any at all suggest they'd rather not be given the red badge of censure. But I also see your point, similar to the old politician's line to the reporter, "I don't care what you say about me, just spell the name right." So I remain uncertain.
"And its decision to pick Seagate, while Goldman lines up behind Micron, may also make sense."
Are you implying something not spoken?
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