Thursday, January 31, 2013

Investopedia: Weak PC Demand Weighs On Seagate

Investing in Seagate (Nasdaq:STX) is at least a little like playing chicken with a freight train. While I don't want to entirely dismiss Seagate's potential to transition into new products, technologies and end markets, the fact remains that its core hard disk drive (HDD) market is facing a one-two punch from increasing solid state drive (SSD) substitutions and a switch from PCs to mobile devices, like smartphones and tablets. Although the HDD business is not going to vanish, investors face the difficult prospect of trying to get both the timing and the magnitude of the decline right, as well as Seagate's ability to generate (and/or reinvest) cash during that decline.

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