Western Digital’s most recent trend suggests a bearish bias. One trading opportunity on Western Digital is a Bear Call Spread using a strike $57.50 short call and a strike $62.50 long call offers a potential 16.01% return on risk over the next 7 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $57.50 by expiration. The full premium credit of $0.69 would be kept by the premium seller. The risk of $4.31 would be incurred if the stock rose above the $62.50 long call strike price.
The 5-day moving average is moving down which suggests that the short-term momentum for Western Digital is bearish and the probability of a decline in share price is higher if the stock starts trending.
The 20-day moving average is moving down which suggests that the medium-term momentum for Western Digital is bearish.
The RSI indicator is at 31.68 level which suggests that the stock is neither overbought nor oversold at this time.
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LATEST NEWS for Western Digital
Western Digital (WDC) Outpaces Stock Market Gains: What You Should Know
Wed, 09 Oct 2019 21:50:09 +0000
In the latest trading session, Western Digital (WDC) closed at $56.53, marking a +1.82% move from the previous day.
Short-Term Pain and Long-Term Gain for Micron Stock
Fri, 04 Oct 2019 12:35:37 +0000
Valuing a cyclical play like Micron Technology (NASDAQ:MU) stock is difficult for two reasons. In theory, valuation should be based on so-called “mid-cycle” earnings, but calculating those earnings isn’t easy when it comes to MU. And volatile earnings like those of MU can lead to volatile trading, which is exactly what we’ve seen from Micron stock.Source: Charles Knowles / Shutterstock.com Indeed, in the last three years, MU stock has moved from under $20 to over $60 to a current price just north of $43. And its earnings have been all over the map. Micron was unprofitable in fiscal 2016 – and earned almost $12 per share on an adjusted basis in fiscal 2018. * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? Its EPS will likely head below $3 in fiscal 2020, based on analysts’ average estimate. And so after MU stock looked almost absurdly cheap, at one point trading below four times its non-GAAP EPS, now, at 17 times its forward earnings. it looks reasonably valued at best,InvestorPlace – Stock Market News, Stock Advice & Trading TipsThe issue with Micron stock at the moment is that the two ways of evaluating the stock seem to point in different directions. Fundamentally, I still see MU stock as a buy. Indeed, this summer I called it one of the best S&P 500 stocks to buy.But technically, the selloff following its Q4 earnings makes some sense. Like the Q4 report – which I thought was more concerning than investors seemed to believe – the company’s Q1 guidance looked disappointing. Given the results and guidance, there’s not enough evidence to believe a bottom in MU stock has been set for good.Some investors may choose to focus on the company’s long-term outlook and ride out any near-term volatility in Micron stock. I wouldn’t blame them. But more aggressive investors might want to wait for a better entry point that may well be available in coming months. Is the Bottom in for MU Stock?In theory, the multiple of a cyclical company like MU should contract at the top of cycles and expand at the bottom. That explains why the multiple of MU stock was so low last year: investors were (correctly) anticipating that MU’s earnings would decline. And it also explains why investors are paying over 16 times earnings for Micron stock even as MU’s profits are tumbling.But in practice, the Street’s outlook isn’t always accurate. Investors and analysts get too optimistic at the top, and they get too pessimistic at the bottom. Both phenomena have affected Micron stock in recent years.And so one of the tricks to trying to buy a cyclical stock is not just timing the fundamental bottom or top, but trying to time when investors’ sentiment will shift. Cyclical stocks usually turn a couple of quarters before their businesses do. That has been the case with MU. But investors don’t always correctly price companies’ fundamentals into their stocks ahead of time.Those who buy Micron stock above $40 may be overly upbeat about the company’s future performance. Its Q4 and Q1 guidance both came in below analysts’ average estimates. And some short-term factors boosted the results of both quarters.Per MU’s Q4 conference call, its customers in China are building inventory ahead of potential tariffs and political dislocations. Cost declines have been steeper than they will be going forward.The bounce of MU stock since the company’s Q3 report suggests that investors are pricing in a cyclical recovery starting as soon as next year. I’m far from convinced that such a recovery is on the way.Given the current valuation of MU stock, the company’s earnings and price-earnings multiples may both drop, pushing MU stock back to $30 or lower. The Fundamental Case for Micron StockThat said, I still believe MU stock can rise over the long-term. At this point, estimating its mid-cycle earnings is difficult, given the large changes in its annual profits. But as management said before and reiterated on its Q4 call, MU and its industry have improved over the last three years.Its production capacity has been reduced, enabling it to spend less on equipment. For the most part, its rivals like Samsung are also cutting their production.Moreover,the prices of MU’s products are reasonably intact. The hope is that the boom and bust nature of its business will moderate, even if it likely never will completely end.Last year’s $11.95 of adjusted EPS obviously represents a peak for MU. And given multiple factors, it may not be a peak to which Micron returns any time soon. But with adjusted EPS still likely to come in above $2 this year, it does seem like mid-cycle EPS conceivably could be $4 or $5.I’d certainly rather own Micron stock than, say, Intel (NASDAQ:INTC), given the likely long-term tailwinds for both DRAM and NAND memory that will benefit MU. But on the other hand, MU doesn’t have the linear growth potential of Advanced Micro Devices (NASDAQ:AMD) or the diversification of Broadcom (NASDAQ:AVGO). However, MU’s earnings still can rise.Assuming MU’s mid-cycle EPS is $4+, that suggests the fair value for MU stock still should be above $50. And if supply and demand trends become more favorable than expected, Micron stock can rise still higher.But the question remains: when can that happen? With the market – including chip stocks – weakening, and MU’s Q1 results likely to look soft, MU lacks a catalyst. So while I do expect MU stock to climb above its current level, I don’t know that I necessarily expect it to rally any time soon.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best ETFs for 2019: The Race Is a Little More Gnarly Now * 7 Next-Generation Healthcare Stocks to Buy * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? The post Short-Term Pain and Long-Term Gain for Micron Stock appeared first on InvestorPlace.
Michael Burry’s Western Digital Is S&P 500’s Best Stock in 3rd Quarter
Mon, 30 Sep 2019 23:02:02 +0000
Memory prices stabilizing, fueling rise in his biggest holding Continue reading…
Here’s Why We’re Wary Of Buying Western Digital Corporation’s (NASDAQ:WDC) For Its Upcoming Dividend
Sat, 28 Sep 2019 12:56:21 +0000
Western Digital Corporation (NASDAQ:WDC) stock is about to trade ex-dividend in 4 days time. Investors can purchase…
Micron Eyes Worst Day Since 2015 After Outlook Disappoints
Fri, 27 Sep 2019 19:16:54 +0000
(Bloomberg) — Micron Technology Inc. shares tumbled on Friday after the chipmaker gave a forecast for both earnings and gross margins that was below expectations. The company’s chief executive officer also warned about the impact that global trade tensions were having on its business.Despite the cautious commentary, many analysts suggested that the worst may be over for the company, seeing signs of a trough in the market for memory chips. As Credit Suisse wrote, this was “a messier bottom, but still a bottom.” Barclays said that while the quarter’s results didn’t represent “the perfect start to the recovery,” they did indicate that the memory market “does seem to be heading to a better place.”Shares fell as much as 11.4% in their biggest drop since January 2016, and are on pace to see their largest one-day percentage decline since June 2015. The loss comes after Micron surged nearly 50% between a June low and the close of trading on Thursday. Rosenblatt Securities credited the drop to profit taking after the recent rally, and added that “investors should be opportunistic” in buying on weakness.The Philadelphia Semiconductor Index dropped as much as 2.9%, participating in a broad market decline. Among other names, Applied Materials fell 5.6% while Lam Research was down 6.1%. Western Digital Corp. lost 2.4%.Here’s what analysts are saying about Micron’s results:Citi, Christopher DanelyThe outlook was “well below what we believe were sky-high expectations.”The market for DRAM chips “is closer to the bottom and Micron is demonstrating higher trough earnings.”Raises price target to $35 from $30, which matched the Street-low view. Reiterates sell rating, citing the stock’s recent advance.Credit Suisse, John PitzerThis was “a messier bottom, but still a bottom.”While the results were “disappointing” in the near term, the firm has increased confidence that Micron is “in a profitable cycle bottom for the first time ever” and that inventory levels at customers “have returned to normal levels.”Outperform rating, price target a Street-high $90.Morgan Stanley, Joseph MooreThe inventory increases “seem problematic” and suggest that “things are going to get tougher from here.”“Not overly alarmed” by the gross-margin outlook; “the really daunting data point is that the company built inventory dollars” in a meaningful way on a sequential basis, even in the seasonally strongest quarter of the year.Equal-weight rating, $48 price target.Barclays, Blayne CurtisDespite better-than-expected revenue, the focus will be on the gross-margin outlook, which was “disappointing.”“Despite all the increasing enthusiasm on pricing, it’s not flowing to the bottom line.”This “wasn’t the perfect start to the recovery,” but “the memory market does seem to be heading to a better place and we would be interested if the stock pulls back.”Overweight rating, $50 price target.KeyBanc Capital Markets, Weston TwiggWhile Micron is seeing “improving demand,” memory pricing “remains depressed and [gross margins] may remain low until demand trends accelerate.”Affirms overweight rating, citing the long-term potential of the memory market and the company’s competitive position. Price target raised by $1 to $59.Rosenblatt Securities, Hans MosesmannThe results “indicate we are starting a recovery phase in the memory semiconductor cycle.”Says the negative reaction to the quarter is “profit taking,” and adds that “it is clear to us that the cycle has turned, Micron is a stronger company in virtually all aspects of the business, and investors should be opportunistic” in buying on weakness.Buy rating, price target raised to $80 from $60.What Bloomberg Intelligence Says:Despite “improving NAND and DRAM fundamentals,” steep price declines and other factors “may roil margins” in the first half of next year. “The magnitude and length of the supply-demand mismatch may determine how quickly balance can return to drive sales growth in 2020.”- Analyst Anand Srinivasan- Click here for the report(Updates stock in third paragraph)To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Steven Fromm, Scott SchnipperFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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