PC.net 2019 Tech Stock Pick: WDC January 1, 2019 – by Per Christensson
Recently, I've enjoyed making a stock pick at the beginning of each year. I choose a single stock that I think will do well in the next 12 months. Last year, I chose AMD. It started the year at 10.98 and hit a high of 34.14 in September, for a gain of 311%. Like a lot of high-flying tech stocks, AMD came back to earth in the last quarter of 2018, but it still finished at 18.46, a 68% gain. This year, for the first time, I've decided to share my annual stock pick on PC.net. For 2019, the stock is Western Digital (ticker symbol: WDC). If you're not familiar with Western Digital, its primary business is producing data storage devices, such as HDDs and SSDs. Like AMD, WDC has fallen a lot over the past few months. The stock is heavily oversold, IMO. While consumer hard drive demand has fallen and prices of flash storage have declined, I see a lot of upside for Western Digital this year. Enterprise storage investment is still increasing at a rapid rate and flash storage (NAND) pricing is cyclical and will eventually recover If there is one constant among all the cloud-based services, it is the need for storage – and lots of it. While Western Digital isn't the only player in the enterprise storage market (I also like Seagate), I think Western Digital is the best value right now. The current stock price of WDC is 36.97, which gives the company a low P/E ratio of 5.21 and a nice dividend yield of 5.41%. Those numbers combined with the potential upside and limited downside over the next 12 months makes the risk/reward of WDC the best of any stock I can think of right now. So there you have it: my 2019 stock pick is WDC. While it's currently trading at a historically low price of 36.97, I wouldn't mind if it dropped a little further, so I can buy more shares at an even better price. I'm guessing that by the end of 2019, the price of WDC will be significantly higher. Important: This article is an opinion and should not be considered professional investment advice. No matter whose advice you decide to listen to, remember: nothing in the stock market is guaranteed. ◀ December 7th | March 26th ▶ |