While their stock recommendations in the drive space is mediocre, their inventory track record is credible;
However that said, a couple of points here:
1. They indicated it was a second tier build. The major distributors have been reporting low or out of stock levels for several desktop products. The OEM ships are well along for this quarter, so STX & WDC may have had a major shipment just arrive at the distributors who then went from a no or low level of inventory to postive inventory. For example, drives that may have been out of stock are now in stock, albeit at low levels. They key thing to watch is how quickly these drives in inventorey are sold.
This may have paniced the some members of the slumbering herd.
2. On Monday, Seagate stated they expected the industry to end the quarter with inventory levels below the historical average, and their levels should be under the industry average levels.
3. STX has concentrated on OEMs, so its a bigger deal for WDC.
4. Avian remained bullish on this quarter and the future for the drive space.