1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Holly LaFon
Holly LaFon
Articles (9485)  | Author's Website |

First Eagle Comments on Western Digital

Guru stock highlight

December 05, 2018 | About:
Why it was purchased: The position in Western Digital (NASDAQ:WDC), a hard-disk-drive company, was initiated in December 2016, a year after the company acquired SanDisk, a flash memory (NAND) company. (SanDisk had been in the portfolio). In addition to deal synergies, the acquisition seemed likely to render Western Digital’s gross margin profile less cyclical than it had been in the past, as an improved industry structure could potentially lead to higher trough margins in Western Digital’s cyclical growth.

Why it has not worked this year: The stock underperformed from late March through late September due to concerns that NAND sales and margins had peaked.

Why it was still in the portfolio: NAND margins were down, but the Fund’s investment thesis—that changes in industry structure could lead to sustainably higher margins—appeared to be playing out. Based on the prices paid in recent acquisitions of NAND businesses, we believed that Western Digital’s shares were undervalued. The company initiated a share repurchase program representing approximately 30% of its market cap, and it provided a 3.5% dividend yield.

From First Eagle Investment (Trades, Portfolio)'s First Eagle Fund of America's third-quarter 2018 shareholder commentary.

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website

Rating: 5.0/5 (1 vote)



Samsun3622 - 4 weeks ago    Report SPAM

I am recently searching for a most supportive web portal, that the best place for finding a audio device fix details and it is always provide a perfect instruction for any wireless connecting issue. thank you very much for using this tutorial.

Please leave your comment:

Performances of the stocks mentioned by Holly LaFon

User Generated Screeners

pascal.van.garsseHigh FCF-M2
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat