Stock Spotlight: Seagate (STX)

19 Jun

Last year at its shares fell to $9.50 (October 2011) and now as of June 18th, 2012 are trading at $23.19 per share.  Many analysts are saying that the stock is a definite buy.  Seagate‘s prices are rocketing the Cupertino, California company said that it earned $1.1 billion as of first quarter 2012 which is up tenfold from the same period a year earlier.

It is expected that the company will earn an additional $7.10 per share in the fiscal year ending June 2012 and an additional $9.42 in the following year to June 2013 and based on the $9.42 per share earning the stock trades at an extremely low to 3.2 times earnings.

The past two years of growth might be skewed due to the temporary shortage of disk drives caused by the flood at the main headquarters in Thailand which may have fueled this year’s sales.  Some long-term challenges are that disk drives for PCs are expected to fade as smart phones and tablets become more useful to the masses.  With only a few competitors such as Western Digital and Iomega.  Seagate is poised well.  To Seagate’s credit they are silently entrenched in cloud computing.  Their drives are what are commonly used and data centers across the nation.  However, they are also moving strongly towards products for tablet and smartphones. Their long-term profit growth is cautious but promising.

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Posted by on June 19, 2012 in Stock Spotlight


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