Skip to main content
No. of Recommendations: 0
Hi everyone,

What do you guys know about Seagate Technology, harddrive maker, especially in the enterprise market?

It's got a really low P/E, announced a large buyback program (to be funded at least in part by debt, including the recent $750 million bond placement), has rejected a going private offer, and has an interesting 1.4% / 0.7% / 0% MUE pattern (at 15% discount).

Cheers,
Jim
Print the post Back To Top
No. of Recommendations: 0
If I am not wrong this company has cheated the shareholders in the past by going private while wiping out sharholders for a pittance and then coming back with an IPO under favorable conditions.

Over the last 10 years its revenues have increased by a mere 68% while staying stagnant over the last 4 years.

I am not sure what its future revenue growth prospects are given the competition and the emergence of solid state drives. I do not know seagate's role in the latest solid state drives which are the future.

Anurag
Print the post Back To Top
No. of Recommendations: 0
Thanks, Anurag.

From my reading, HDD are still the primary (and cheapest) storage media. SSD are still a relatively small share of the storage market and are much more expensive per gigabyte, though that will almost certainly come down. Seagate is supposed to be in SSD, as well, but is playing catch up a bit on that.

It recently turned down a LBO offer and instead is leveraging its balance sheet a bit (further swinging to a net debt position) to help fund a rather large share repurchase ($2 billion, out of a $7 billion market cap). Has the EBIT to handle the interest and with $1 billion in FCF, should be able to pay down the debt relatively easily.

Cheers,
Jim
Print the post Back To Top