What is the Bull case? Here are my thoughts on why I am long....
Incredibly low PE
Margins staying firm in the new Duopoly
Demand is increasing rapidly due to the "Cloud" and the storage boom
Shares being repurchased hand over fist which not only raises the EPS but makes it much easier for the company to be bought out since it lowers the already low P/E..... Goal at the end of 2013 is 215m shares outstanding.
Large dividend payout which the company said they plan on increasing 10% yoy
STX large investments in R&D allow them to lead the industry in enterprise storage
SSD's are not overtaking HDD's or hybrids due to price and not being anywhere close to meeting demand in enterprise...
Unforeseen injection of cash from WDC lawsuit (700m)
New product launches by MSFT
Historic time for the Tech sector to climb (Oct.-Feb) Due to companies spending on technology infustructure before the end of the yr. Not to mention holiday spending
Jim Cramer does not like this stock
Just my thoughts
About the share repurchase numbers you have .....
Seagate has published two goals: 350Mill by end of CY12, and 250Mill by the end of CY14. You're a bit optimistic on your targets. Reference the presentation made during the investor day.
Also, they stated that the current share count was 383Mill. Compare that to 396Mill at the end of June. The rate of repurchase seems to have slowed (higher cost?), so I'd be willing to bet that the goal of 350Mill by the end of this Dec. may be a little too aggressive. That equates to about 10Mill shares per/month, or about twice the rate over the previous 3 months.
"396Mill at the end of June."
"250Mill by the end of CY14"
A 37% decline in shares outstanding!
Yet INCREDIBLY, 20 analysts average estimate declining EPS for fy14!!!!
For you mathmatical #$%$, net income MUST decline by MORE than 37% to dubiously achieve a decline in EPS with 37% less shares.
For you #$%$ #$%$, STX is using your money ( retained PAST earnings) to disguise a 37%+ decline in net income!
What multiple do you give a stock with 37+% declining earnings! Higher multiple dramatically lessens return.
Demand is increasing rapidly due to the "Cloud" and the storage boom -- Nothing near rapid !
Unforeseen injection of cash from WDC lawsuit (700m) -- I don't think so !
Taking these 2 out, STX is still seriously undervalued.
Sentiment: Strong Buy
you missed i think the biggest one. seems that hybrids are the new wave and not SSD's like everyone thought.
they scored a win with dell and if you look windows 8 is even tailored to work with it, i guess we now know why steve is on their board.
There is no recent public update to the outcome of the request by WDC to vacate to arbitration award...amazing, time just ticks away and STX has no money.
Currently, I don't own any shares of WDC or STX. So financially I have no bias to the ultimate case outcome.
Yet, reading through all the available public information on the on-going case, I remain convinced that the decision rendered by Judge Robert Schumacher that denied material evidence by WDC to be considered in the case did indeed deprive WDC of a fair hearing (by the arbitrator).
WDC likely gets the award vacated and a new arbitrator is appointed by Judge Poston, and the case goes back to arbitration where WDC gets the opportunity to present pertient evidence towards the case.
When does the case advance? Heck if I know...do you?