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Seagate Technology Public Limited Company Message Board

  • sterlingstudd sterlingstudd Jan 23, 2010 9:02 AM Flag

    If you sold or shorted STX yesterday...

    ...I would love to hear your reasoning. I'd like to try and understand the bear case a little better. Thanks in advance.

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    • A dividend would most likely put a floor on the stock but I doubt it would lead to a sustained valuation increase. Money is probably better spent on R and D to maintain/increase market share. Also more cash on hand makes them more attractive as a takeover target in my opinion.

    • That is what I am thinking/hoping also...but even if the P E ratio does not improve, STX high earnings on a consistent level should get this stock moving once the programmed trading sell-off is complete.

      Can't see why STX does not reinstate a decent dividend as well...any thoughts on that subject are welcomed from all on this board.

    • I agree with the ugly step sister quote. However STX, seems to be getting their act together again under the helm of Luzco after Watkins nearly drove it into the ground. So it seems that if STX can start performing strongly over several qtr's, then that mentality should turn around.

    • While I amlong STX and have no position in WDC, I think there will always be a differant P E applied to each because in Wall Street this stock is perceived as the poor stepsister....somewhat aking the WAS vs CVS...CVS makes more money and has a lower P E, but WAG has until recenty been the darling of Wall Street in the drugstore sector.

      I sold a bunch of STX June $15 and $16 puts before earnings were announced when STX was at $17.70 area and unless the meltdown gets really ugly, I should be able to buy those puts back at the next earnings announcement in May for only a few cents per contract.

      for those unfamiliar with puts, the seller of a put is in fact holding a long position in STX entity.

      Good luck to all...on Thursday morning I was able to buy back my Feb $17 puts for 5 cents....sold them a 2 days earlier at 70 cents!. options is a good game for volitile stocks like this one.

    • "Hence Bailey's novel new attempt at GS to construct a "normalized annual earnings" number to apply his 8 P/E to as a mean P/E"

      Call a spade a spade,

      It's totally contrived BS that directly contradicts what he was saying when he upgraded STX to buy on 7/10/09 and 7/20/06.

      On 7/10/09 Stock was at $10 and consensus EPS then was $0.79, or a PE of 12.7!!!!!

      Then on 7/20/06, he upgraded STX to buy when it was $24 and STX went on to post $1.53, or a PE of 15.6.

      Today, he is neutral with $20 target and the FY10 Consensus is $3.37 or a PE of 5.9.


    • I realize that STX has a 2 or 3 multiple of outstanding shares over WDC, but at some point I expect this gap to narrow between them. The question is how does that happen.
      1) STX goes up
      2) WDC comes down
      3) 1 & 2 and they meet in somewhere in the middle. Thoughts?

    • Agree with most of your post except the part about "Bailey's novel new attempt at GS to construct a normalized annual earnings number to apply his 8 P/E to as a mean P/E". His methodology is rather simplistic and assumes that the future will be nearly identical to past cycles. My point is: no matter how you choose to value STX today, the risk/reward is HEAVILY skewed in the longs' favor (10% downside, at least 50% upside).

    • Not that I sold or shorted, because I didn't, but I think that the answer would be a combination of because 1) the obvious general downward trend in the market and in tech in particular was destined to take STX down with it and so I knew I would be able to buy back or cover at lower prices in the near future; or 2) there is a double dip recession coming and STX (and you long investors) are smoking some really good stuff if you think that $3 for the fiscal year, or even $2.50, is going to pan out.

55.79+0.42(+0.76%)May 22 4:00 PMEDT