Great company, going to keep going.

could turn around some day

Mad About Options: Western Digital Clocked: The Mad About Options crew reviews Jim Cramer's recent bearish comments about Western Digital and offers options strategies for traders and investors. Also hear options ideas for Altria and Lincoln National.
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cyclical, great company w/ great team.

Q: The stock's around 30?

A: Marcin: It's expected to make about $4 a share in both the fiscal year that ends in June and the June 2009 year. We think Western Digital can make between $4.50 and $5 in fiscal 2009. Hard-drive stocks never get a high valuation, but if the company gets an 11 P/E on $4.50 a share in earnings, it could approach $50 share. A company that produces revenue growth of 20% a year, generates a lot of free cash and operates in a very appealing part of the technology business ought to be able to get a 10 to 12 P/E ratio.

The Lake Forest, Calif-based hard drive producer added $500 million to its buyback program. The amount and timing of the repurchases will depend on market conditions but the company expects the plan to be finished in five years. Since 2004, under its previous buybacks, the company has repurchased $250 million in common stock.

John Coyne, WD president and CEO added, "Our sustained strong performance continues to generate substantial free cash flow even while we continue to invest in our technology, operations and integration of the recently-acquired Komag media operations into our business. The additional authorization reflects our confidence in the company's financial strength, its future and our commitment to enhancing shareholder value."

On January 23rd the company delivered strong second quarter earnings with revenue of $2.2 billion propelled by a 46% increase in hard drive revenue. Net income was $305 million or $1.35 a share, a 137% gain over net income of $128 million or 57 cents a share in the same period last year.

Analysts at Thomas Weisal Partners reiterated their overweight rating on the stock and awarded the stock with a huge target price of $46. They mention the company's strong position in notebook computers and external hard disk drives and they expect the company to experience above-peer EPS growth.

So we have a buyback, great earnings, an overweight rating and two well-known investors into the stock. It may be time to do some more homework on Western Digital.

Western Digital (WDC) was downgraded from Neutral to Underweight, JP Morgan said. Stock may be peaking, even though the industry outlook remains strong. See little upside earnings potential in the coming quarters.

Western Digital (WDC) was downgraded to Neutral rating from Buy at UBS. However, price target and FY 2008 eps both raised to $36 and $3.97, respectively.

Citigroup also downgraded WDC -- along with fellow disk-drive stocks STX -- to Hold. Business is nearing a cyclical peak, and more capacity is expected to come online in the third quarter.

tiny hard drives that will go into phones

Positive outlook, we'll see.

Does not move, don't know why I bought it.