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This column was originally published on RealMoney on Sept. 25 at 2:05 p.m. EDT. It's being republished as a bonus for readers.



has become a bigger battlefield stock than ever. And that's saying something, because it is one loved and hated stock, depending on who you're talking to.

The company is basically the poster child for NAND storage, which is a really small and light way of storing data compared to a hard disk. Hard drives are inside most computers, digital video recorders and modern-day game consoles. NAND is what stores data on


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iPods, in most digital cameras, cell phones and so on.

Because hard drives have been a de facto standard for computer storage for so long, they have cost advantages on a per-bit basis vs. NAND. Likewise, mainstream hard-disk drives have at least an order of magnitude (10x) more capacity than mainstream NAND. That price-per-bit difference is illustrated by the fact that you can buy a 250-gigabyte hard drive for $80, while a 1-gigabyte NAND flash drive will cost you $50 at

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Cost differentials or not, NAND demand has exploded as consumer products like the iPod nano, digital cameras and cell phones with digital cameras all require storage in tight confines. And SanDisk is pretty much the dominant company out there, becoming more dominant as it works its purchase of


to completion, too.

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SanDisk's market cap hovers at about $10 billion, which is about three times its projected revenue for next year. But because demand has been so strong and because the company hasn't had too many inventory issues at its customers and distributors, SanDisk has been cranking out the profits on that revenue. It's expected to earn $2.75 a share next year, putting the forward P/E at about 20 times.

One thing about SanDisk, though, is that its earnings are wildly volatile. Any inventory corrections in its market or any pause in demand can really crush margins and make that $2.75 look wildly optimistic. That said, most reports I've read and folks I've talked to lately seem to indicate that NAND remains on the shortage side of the shortage/glut equation and that pricing is strong. If that's the case, the company should report some strong numbers and guide nicely. And Wall Street will likely model out whatever strength comes from this quarter into the next year. That would get this stock a-popping again.

The permabears love to hate this name and have been betting against it for years. Commodity pricing will kill SanDisk, they say. And they might be right -- if and when competitors and SanDisk ever catch up with demand for this secularly growing industry. That might take several more years.

This is one to put on the radar as a potential long-side trade when it gets to earnings-report time on Oct. 19. But we'll have to see what that pitch looks like when we get there.

At the time of publication, the firm in which Willard is a partner was net long Apple, although positions can change at any time and without notice.

Cody Willard is the manager of a hedge fund and a contributor to the

Financial Times


VON Magazine

. He is also a regular guest on CNBC's

Kudlow & Company

and an adjunct professor at Seton Hall.

He earned a bachelor's degree in economics at the University of New Mexico. Willard appreciates your feedback --

click here

to send him an email.