Bargains abound in disk-drive companies – Barron’s

NEW YORK, May 16 (BestGrowthStock) – Shares of disk drive makers
Seagate Technology (STX.O: ) and Western Digital Corp (WDC.N: ) are
trading at bargain prices, but they could rise 50 percent in
the coming year, Barron’s said in its May 17 edition.

Seagate trades at around $18, only five times its projected
profit for the year ending June 30. Western Digital trades at
around $38, six times its estimated profit. These are two of
the lowest price-to-earnings ratios in the technology industry,
according to Barron’s.

The two companies each have about 30 percent market share.
Overall the industry is expected to generate more than $30
billion in revenue this year, up 20 percent from last year, as
more PC users buy external disk drives for file back-ups or to
download music and videos from other computers, said Barron’s.

Skeptics point to the historically volatile nature of the
business and the fear that flash drives, such as those used in
iPods, will make bulky disk drives obsolete.

However, Barron’s said the industry has been helped by
consolidation that has shrunk the number of producers from 12
to five over the past decade.

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(Reporting by Helen Kearney, editing by Maureen Bavdek)

Bargains abound in disk-drive companies – Barron’s