This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Easy Sledding for Storage Makers

An upgrade to Seagate (STX) and a sweetened outlook for Western Digital (WDC) cheered storage investors and led the sector to modest gains.

Goldman Sachs analyst Laura Conigliaro raised her rating on Seagate to in-line from underperform. In a note to clients published Tuesday, she said that better seasonal demand, slightly improved desktop pricing and continuing strong sales of hard drives for notebooks and consumer electronics devices, such as digital video recorders, should help the company hit or slightly beat current-quarter estimates and "enter the seasonally softer March quarter with low inventories."

The same conditions bode well for rivals Western Digital and Maxtor (MXO) and should lead those companies to issue "incrementally more positive comments" in the next few days, Conigliaro wrote. Indeed, Western Digital raised its guidance late Monday (likely after Conigliaro wrote her report, but before it was published).

However, Conigliaro doesn't anticipate an immediate run-up in shares of Seagate. "Since STX has already run up from its low of $14, we expect any additional near-term gains to be fairly minor," she said. Goldman Sachs has an investment-banking relationship with Seagate.

Western Digital, which is occasionally viewed as a proxy for digital hardware at the consumer level, expects to earn 36 cents to 39 cents a share on revenue of $1.04 billion to $1.075 billion. Its old guidance was for earnings of 33 cents to 36 cents a share on sales of $1.025 billion to $1.075 billion.

In recent trading, shares of Seagate were up 75 cents, or 4.1%, to $18.26.

Seagate, which jumped to an early lead in sales of hard drives for use in consumer electronics devices, saw sales of 1-inch drives drop by about 50% to somewhat more than 1 million in the last quarter. Pushed by competition by flash memory, which is replacing hard drives in some consumer products, including Apple's (AAPL) iPod nano and shuffle, sales of the small drives will likely be flat in its current quarter, the company predicted on its last earnings call.

Of the 1 million 1-inch drives sold in the quarter, about half went to products outside the digital-music market, including GPS devices and a new photo printer sold by Hewlett-Packard (HPQ) that includes a hard drive.

In recent trading, Western Digital had gained 23 cents, or 1.6%, to $14.73; Maxtor added 8 cents, or nearly 2%, to $4.11.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs