Western Digital is a buy and I do not agree with the current sell sentiment surrounding the company and stock. No, the Toshiba memory deal did not go their way. That sucks for the near term, but it doesn’t change the long-term fundamentals. Yes, most people were waiting on the Toshiba deal to justify current valuations and to try and determine the true market value. The problem is everyone has gotten too caught up in the deal and it’s failure and they’re not paying attention to the company itself.
THE TRUTH ABOUT WDC
Western Digital [stock_quote symbol=wdc] is better than its competitors. It’s best-of-breed and their products are far superior than the other, as popular (for now), manufacturer: Seagate Technologies [stock_quote symbol=stx]. That’s all you need to know. That’s the truth.
SEAGATE AND THE PAST
In the past, I was a huge fan of Seagate. In fact, for more than ten (10) years I sold nothing but Seagate products. I hated Western Digital and really thought they were crap for most of my tech career. I owned a large position in Seagate stock and for years they paid a good dividend. Then, around 2014, things began to change. I noticed more and more Seagate drives failing. In fact, every failure we had for nearly two (2) years centered around Seagate.
In 2016, I was upgrading a hard drive in a six (6) year old laptop (not my idea, but whatever) and noticed the drive I extracted was a Western Digital. I remember saying out loud “well, I’ll be damned no wonder it still works” and that’s when it hit me. Seagate was dying and Western Digital was quietly making better products. I sold my entire Seagate holding that very day and began buying calls in Western Digital.
WESTERN DIGITAL THE FUTURE
Storage is important and will always be required. What is more important is storage durability. The last thing you want to do is move an enormous amount of data to crap drives and end up having to do it all over again and losing data in the process. I stay the hell away from Seagate at this point. Western Digital Blue Solid State drives perform beautifully and I am upgrading hard drives and fixing crashed Seagate drives with WDC Blue’s more now than ever before.
No, I am NOT a seller of WDC. I believe the Toshiba deal and the negative sentiment hovering over WDC because of the deal will eventually fade away. I believe the earnings for WDC over the next twelve (12) months will prove more technicians, such as myself, are figuring out that Seagate (and others) sucks and WDC is taking market share.
Western Digital is the best and time, along with earnings, will prove this. Buy the dips and be patient. I have a $100 12 month price target on WDC.