My 1st post on stock message board, so be easy on me please :)
With WDC and STX at multi-year highs (ALL TIME highs when you don't look at the stock formerly known as SEG), I see component manufacturers HTCH and IVAC near multi-year lows. What gives????
Is it a good time to invest in IVAC, HTCH, XTRX to see large magnitude gains over the next year or so???
Please elaborate on the condition of the component suppliers? And your take on their futures / valuations.
Is there something inherently wrong with their business models, or are they just late to follow the run up by STX and WDC and going to jump soon themselves?
I'm looking for a couple double-baggers or greater...
Long STX (loaded 2,600 #$%$ the $5-6 range in 2008/09 - sold 300 today for $41.10). 7 bagger!!! Basically this sale today covered my initial investment, so I'm sitting on 2,300 shares for "free" - not to mention all those DIVIDENDS!!!!!
Long AMD (bought 1,200 sh @2.49 last week) - Looking like a good idea thus far!!!!
Looking to get into WDC on some weakness....
It's a speculative play, but if you are looking for a two bagger I would consider HTCH:
They turned in a mixed March report, Their loss ($018) was much lower than what investors had forecast and they posted their highest gross margins FY2010, but their suspension shipments fell back to 98 million due to slower than anticipated new program ramps..
Their need to increase suspension sales by 20-25% to get back to profits. This may appear difficult due to constrained drive TAM growth, but here is HTCH's path to profits:
1. Gain share via ramp of new Dual Stage Actuator (DSA) suspension. They are doing well on the quals. By the end of this quarter DSA ships could be 40% of total.
2. Slowing areal density is increasing drive capacity and component counts. For each 0.1 increase in heads/drive, suspension shipments grow 3%
3. New program wins. Increase shipments tto STX, only 11% of total now.
4. Generate revenues from other areas like component assembly
5. Drive TAM growth, perhaps 3% to 5% in 2H13
6. Growth of cloud storage, CSCO sees 45% growth CAGR thru 2016. 85% of data on the cloud will be
stored on hard drives
7. Cut costs, ramp of Thai assembly ops by mid 2014 should save $2 M/Qtr
NOT FOR THE FAINT OF HEART, DON'T BUY WITH THE MORTGAGE MONEY!!!!!!!!!!!!!!!
"t's a speculative play, but if you are looking for a two bagger I would consider HTCH"
Incredible call, HTCH doubled in less than 3 weeks time and all Spunky could do is wet his panties about it!
ROFLMFAO@-Spunky the Village Idiot
Thanks for the insightful reply. These are some speculative plays on the side and NOT the mortgage money. I'm a STX investor, how could I be Faint of Heart??? (lol)
Took a long position Monday morning. Looking good thus far, but ONLY time will tell. :)
IVAC and HTCH are levered to HDD capex increases and given the tepid capex forecasts, not too exciting. I like XRTX a lot and they have a lot going for itself. Currently unprofitable, they have a history of very strong but lumpy profitability. It's a $10 stock, regular 3% dividend, has paid $2.15 dividends in the last 4 months and still has a ton of cash and BV less than 1. XRTX has three divisions; HDD test equipment, OEM Storage appliances and their new Hi perf storage division.
Unlike IVAC and HTCH, XRTX' HDD division is profitable. They are the only suppliers of 3.5" drive test equipment and since the market for cloud storage type 3.5" drives is growing at a good clip, XRTX is getting a lot of business there.
Overall XRTX revenues are falling YOY as they lose a big Netapp OEM storage contract but this division too is still very profitable and are ramping some big new Tier 1 customers(HP/3Par, Microsoft/Azure and a yet to be announced other big Tier 1).
Those two divisons alone would put current XRTX eps at about $2 but they are plowing a lot of cash into developing their Hi perf division. This division is the next generation of storage and incorporates a lot more software, specifcally file and data management software such as Lustre, Hadoop, Cassandra etc. XRTX launched these products last year and will likely take awhile to ramp but should be very successful here. They have, in the last six months announced new partnerships for these converged storage appliances with a lot of big players including Cray, HP, Dell, AMD, Hitachi LG and Pentaho and will serve a number of fast growing markets including HPC, Big Data and Business Analytics.
XRTX is also a takeover target. Baker St Capital bought 25% of XRTX outstanding shares and the possibility of M&A has been acknowledged by management. If they don't get bought out, I think they'll continue being an overall very profitable company with strong growth and more special dividends ahead.