Trade-Ideas LLC identified

Western Digital

(

WDC

) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Western Digital as such a stock due to the following factors:

  • WDC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $299.0 million.
  • WDC traded 11,285 shares today in the pre-market hours as of 9:04 AM.
  • WDC is up 3.6% today from yesterday's close.

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More details on WDC:

Western Digital Corporation, together with its subsidiaries, engages in the development, manufacture, sale, and provision of data storage solutions that enable consumers, businesses, governments, and other organizations to create, manage, experience, and preserve digital content worldwide. The stock currently has a dividend yield of 5.1%. WDC has a PE ratio of 11. Currently there are 13 analysts that rate Western Digital a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Western Digital has been 6.4 million shares per day over the past 30 days. Western Digital has a market cap of $9.2 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.22 and a short float of 12.6% with 5.59 days to cover. Shares are down 32.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Western Digital as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • WDC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.62, which clearly demonstrates the ability to cover short-term cash needs.
  • 36.07% is the gross profit margin for WESTERN DIGITAL CORP which we consider to be strong. Regardless of WDC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WDC's net profit margin of 2.62% is significantly lower than the industry average.
  • WESTERN DIGITAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, WESTERN DIGITAL CORP reported lower earnings of $6.17 versus $6.69 in the prior year. For the next year, the market is expecting a contraction of 16.4% in earnings ($5.16 versus $6.17).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 80.7% when compared to the same quarter one year ago, falling from $384.00 million to $74.00 million.

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