Seeking Alpha

Seagate Technology (STX) is downgraded to Sell at JPMorgan, which cites a revision to shrinkage...

Seagate Technology (STX) is downgraded to Sell at JPMorgan, which cites a revision to shrinkage from growth in expected hard disk drive unit demand in 2013. Shares -3.6% premarket. Western Digital (WDC) -1.1% premarket.
Comments (2)
  • JPM analysts can go take a flying leap. One of them stated that McMoran had zero equity value all of a week before the FCX buyout with financing handled by, of all people, JPM.

     

    Let's look at STX. The dividend has more than doubled in the last 6 quarters and their payout ratio is somewhere around 20% so there's plenty of leeway there. Their $20 price target would give you a starting yield of 7.6% and a TTM PE of 2.6. That's a 10% YOC if they only meet their own obviously lowball target of 10% dividend growth annually. Earnings will certainly YOY but they'd have to drop by almost half to get the PE up to 5. That doesn't even consider the massive buybacks.
    12 Dec 2012, 10:19 AM Reply Like
  • Analyst Three Step:

     

    Get the downgrade.
    Wait for the stock to go down.
    Buy the stock.

     

    Then Do-Si-Do.
    12 Dec 2012, 11:41 AM Reply Like
DJIA (DIA) S&P 500 (SPY)