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Tuesday, June 3, 2008

Western Digital (WDC) seems way ahead of itself

The hard drive industry is seeing some pretty severe price competition. I've been eyeing terabyte drives for under $200. I don't need a terabyte drive but gosh, it sounds cool to have to measure your storage with a whole new word. I've been fighting off the urge.

I've also been fighting off the urge to short WDC but I'm going to give in if it trades $38.10 ... I think the risk/reward there is terrible for the stock. I've been generally positive on the hard drive stocks on valuation... in the mid-high 20s I've recommended Western Digital more than once. Here it's a sale. Inventories remain on the higher side in the channel.

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