WESTERN DIGITAL (NASDAQ:WDC) STRONG BUY level

Some numbers about Western Digital before we start:

Market Cap 25.25B
Dividend % 2.34%
EPS this Year 34.10%
PEG 0.74
Target Price 114.43
Actual Price 85.6

Data from finviz.com. More about stockscreeners you can find here.

The likes of Netflix NFLX , Facebook FB , and Amazon AMZN rightfully garner a lot of attention as their rapid growth has helped spur the rise of technology stocks. But even the most causal of readers know about these giants.

For investors looking to find growth in the tech sector outside of putting their money in the biggest names, Western Digital Corporation WDC could be a good place to start.

The U.S. tech company manufactures and sells data storage devices and hard drives. The memory and computer storage industry that Western Digital operates in is only set to grow as the amount of data companies and people use grows exponentially.

Now, let’s look at what makes Western Digital a great growth stock.



finviz dynamic chart for  WDC

Growth Fundamentals

Western Digital, which develops and manufactures data storage devices for both personal and corporate use is currently a Zacks Rank #1 (Strong Buy) and sports an “A” grade for Growth in our Style Scores system.

Western Digital’s revenues are projected to surge 7.58% in the second quarter of its fiscal 2018 to reach as high as $5.28 billion. On top of that, the company’s full-year revenues are expected to pop nearly 7% to $20.40 billion.

The data storage company, which boasts big brands such as SanDisk under its umbrella, is expected to see itsQ2 2018 earnings skyrocket 58.32%. For its full fiscal year, Western Digital’s earnings are set to hit $13.17 per share, which would mark a 43.30% year-over-year gain.

In terms of growth, Western Digital’s current cash flow rests at 96%, which crushed the “Computer – Storage Devices” industry’s 2.79% average decline. On top of that, the company’s historic cash flow-the last 3-5 years, annualized-sits at 11.68%, beating its industry’s average, and helps to show that the company has been growing its cash position in recent years.

For investors skeptical that Western Digital will be able to match or beat our current consensus estimates for revenue and earnings, the company has met or topped out estimates in seven of the last eight quarters.

Lastly, for investors concerned that Western Digital might only be a growth play, the company also currently rocks an “A” grade for Value in our Style Scores system, helping it earn an overall “A” VGM score.

CLOUD business is future

Western Digital Corporation WDCrecently announced that it has completed the acquisition of the assets of Upthere, an app-based cloud-storage startup. The company will integrate Upthere into its Client Solutions business unit. However, financial details of the transaction were not disclosed.

Moreover, acting Chief Executive Officer (CEO), Chris Bourdon, will join the Western Digital team as a strategic leader. The company also announced that Barbara Nelson, an executive who joined recently, will lead Western Digital’s cloud services business.

Acquisitions: Key Catalyst for Western Digital

Over the years, Western Digital has focused on acquisitions to expand total addressable market (TAM) and solidify footprint in growth markets. The acquisition of SanDisk has opened new avenues of growth for the company, particularly in the NAND and SSD markets.

The acquisitions of Amplidata, sTec, Velobit, Inc., Arkeia Software Solutions and Virident Systems have not only strengthened Western Digital’s small-to-medium sized business solutions but also expanded its SSD product portfolio.

Reportedly, Western Digital is on the verge of acquiring Toshiba’s TOSYY chip unit, which will significantly improve its competitive position in the NAND flash market.

Final investment evaluation: STRONG BUY

Check our other investment tips in order to improve your 10 Years For Retirement plan.

Remember, this article is sumary of my personal opinions. You should everytime consider stock value by yourself and it’s is your retirement plan investment.

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