Western Digital (WDC) Lags In Post-Market Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Western Digital ( WDC) as a post-market laggard 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 $140.9 million.
  • WDC is down 2.9% today from today's close.

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More details on WDC:

Western Digital Corporation, through its subsidiaries, develops, manufactures, and sells storage products and solutions that enable people to create, manage, experience, and preserve digital content. The stock currently has a dividend yield of 1.4%. WDC has a PE ratio of 19.8. Currently there are 10 analysts that rate Western Digital a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Western Digital has been 1.9 million shares per day over the past 30 days. Western Digital has a market cap of $20.7 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.57 and a short float of 1.4% with 2.00 days to cover. Shares are up 4.3% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Western Digital as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Computers & Peripherals industry average, but is less than that of the S&P 500. The net income increased by 28.4% when compared to the same quarter one year prior, rising from $335.00 million to $430.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 3.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although WDC's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • 37.08% is the gross profit margin for WESTERN DIGITAL CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WDC's net profit margin of 10.82% significantly trails the industry average.
  • Powered by its strong earnings growth of 30.14% and other important driving factors, this stock has surged by 69.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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