Description
Thesis: We believe that a great migration from HDDs to flashbased / SSDbased devices has begun. This makes Nidec a great secular short as it is the last member of the HDD food chain to retain a growth valuation (best case ~5% normalized FCF yield). A near term catalyst could be Octend earnings, where management will likely have to revise its aggressive 4Q unit guidance lower (based on very negative recent datapoints in the PC & HDD supply chain). Strong cannibalization of HDDbased notebook demand by the iPad and other tablets, which to date, all use Flashbased memories (NAND) and not HDDs, will result in lower PC volumes and greater price competition in notebooks / HDDs. This should eventually create volume headwinds and more than usual pricing pressure for component suppliers. As a result, Nidec will miss out year consensus numbers and/or see multiple compression, as it trades at a very large premium to the public HDD manufacturers (STX and WDC). We have passed the critical point of flash being cost competitive with HDDs on 64G  128G consumer notebooks, and Nidec has admits that as much as 50% of the end markets for its motors are in consumer devices. The power consumption, speed, and stability benefits of SSD are allowing it to being to cannibalized the enterprise HDD sector as well.
Description: ~65% of Nidec's EBIT comes from selling HDD motors and other PC components (cooling fans, etc.). This is the company's highest margin business (~18% EBIT margin vs overall Co. at 13 % margin), and it is dominated by "brushless" (electronic) / spindle motors that go into standard 2.5" (notebook) and 3.5" (desktop) HDDs. This motor technology has not significantly changed since the 80s. Nidec's HDD market share was ~60% in 2004 and has gradually increased (to close to 80%) through the downturn w/ industry capacity reductions. There is not an outsized #2 competitor, but Minebea and Alphana Technology have competing HDD motors. As a % of HDD motor sales, Nidec's sales split mirrors the HDD industry: STX is 31%, WDC is 30%, Hitachi is 21%, and Samsung and Toshiba are the other two significant customers. The majority of Nidec's HDD motor sales are conducted justintime, with quarterly pricing. Even though Nidec has 80% market share in HDD motors, it is continuing to cut prices 12% q/q every quarter, in order to "stay on the good side of the HDD co's" (Nidec's HDD motor ASPs are ~$5 on an average total HDD ASP of ~$45). Recent talk of 10%+ HDD ASP declines for 4Q puts significant pressure on Nidec to increase the size of its quarterly price cuts.
The rest of Nidec's operating income is: ~15% optical components (digital camera shutter and lens components for cameras / phones); ~10% machinery automation components (industrial robot applications); and the remainder is "midsized" motors (home appliances, automotive systems, etc.) Nidec has ambitious plans to significantly increase its nonHDD motors business through acquisitions (recently paid ~$760M / ~10.5x EBIT to acquire EMR's appliance and tools motors business, a ~7% EBIT margin business postsynergies).
Mkt Cap is $13.4B USD, EV is ~$15B USD (PF for a recent $720M cash acquisition from EMR), and revs are ~$8.3B USD. Liquidity is ~$90M USD /day.
Updated analyst estimates of the HDD market are well below Nidec's last guidance #'s for the overall market:
HDD Unit Forecasts, Million Units of Sales






Cal 3Q10

Cal 4Q10

Comment


Nidec's 7/23 Guidance

170

185








Gartner's 9/10 Lowered Estimate

165

172



Barclays 9/10 Lowered Estimate

165

172

Lowered 4Q from 177.

Avian's 9/15 Lowered Estimate

160


Would be a "near flat" comparison to Q2.




Normal seasonality is +1015%.

Average

163

172








Nidec's Divergence from Updated Avg Estimates

4%

8%



On top of this, street EPS estimates for FY10 3/11 of ¥502 are already ¥50 higher than Nidec's EPS guidance of ¥452. The street is assuming that Nidec's guidance is conservative and also likely estimating future acquired revenues.
Tablet PCs could be an incremental 2530M units of demand next year, erasing 1/3 of the 1012% average HDD unit growth rate over the last 5 years. In the last few weeks, RSH and some U.S. HDD co.'s have mentioned greaterthanexpected 2H PC unit weakness, partially from consumers delaying purchases to assess the new tablet PC offerings. BBY's CEO mentioned on 9/15 that iPads alone had cannibalized as much as of 50% PC volumes: (
http://online.wsj.com/article/SB10001424052748703376504575491533125103528.html?KEYWORDS=retailers+turn+to+gadgets#printMode). That would be a much more draconian scenario in consumer HDD volumes than what is needed to make this short work.
Valuation on Street Estimates:










Yen 
USD 






Price 
¥7,500 







Shrs Out 
145.1 







Mkt Cap 
¥1,088,063 
$13,109 















Add: Debt 
¥131,601 







Add: Minority Int 
¥59,592 







Add: New Convert Debt 
¥100,000 

Note: 0% interest rate, strike is ~40% premium for ~6.5% dilutive effect. 
Gross Debt 
¥231,601 
$2,790 















Less: Cash 
¥127,374 







Less: EMR Motors Deal Prc 
¥63,080 
$760 






Less: Cash from New Convert 
¥100,000 







Gross Cash 
¥164,294 
$1,979 






EV 
¥1,214,962 
$14,638 






Note: Net Debt 
¥67,307 
$811 












Street 
Street 
Street 

FY 3/2006 
FY 3/2007 
FY 3/2008 
FY 3/2009 
FY 3/2010 
FY 3/2011 
FY 3/2012 
FY 3/2013 
Revs 
¥536,858 
¥629,667 
¥742,126 
¥613,458 
¥587,459 
¥692,953 
¥752,958 
¥800,915 









Gross Profit 
¥123,846 
¥143,040 
¥158,216 
¥130,565 
¥151,122 



% Sales 
23.1% 
22.7% 
21.3% 
21.3% 
25.7% 












EBIT 
¥53,426 
¥64,009 
¥76,833 
¥51,806 
¥78,342 
¥110,481 
¥124,444 
¥134,828 
% Sales 
10.0% 
10.2% 
10.4% 
8.4% 
13.3% 
15.9% 
16.5% 
16.8% 









EBITDA 
¥79,711 
¥94,006 
¥113,167 
¥83,953 
¥107,527 
¥150,691 
¥167,784 
¥184,024 









EBITDA  CapEx 
¥36,526 
¥54,862 
¥77,507 
¥45,452 
¥70,919 
¥85,691 
¥122,784 
¥139,024 
FCF (NI + D&A  CapEx) 
¥24,049 
¥30,785 
¥41,830 
¥21,999 
¥44,538 
¥34,579 
¥66,198 
¥71,862 
CapEx 
¥43,185 
¥39,144 
¥35,660 
¥38,501 
¥36,608 
¥65,000 
¥45,000 
¥45,000 
Net Income 
¥40,949 
¥39,932 
¥41,156 
¥28,353 
¥51,961 
¥70,394 
¥82,013 
¥87,677 
EPS 

¥276 
¥284 
¥197 
¥373 
¥496 
¥578 
¥620 


















Multiples 








EV / Revs 




2.1x 
1.8x 
1.6x 
1.5x 
EV / EBIT 




15.5x 
11.0x 
9.8x 
9.0x 
EV / EBITDA 




11.3x 
8.1x 
7.2x 
6.6x 
EV / EBITDA  CapEx 




17.1x 
14.2x 
9.9x 
8.7x 
P / E 




20.1x 
15.1x 
13.0x 
12.1x 
EV / FCF 




27.3x 
35.1x 
18.4x 
16.9x 









Growth 








Sales Grwth % 

17% 
18% 
17% 
4% 
18% 
9% 
6% 
EBIT Grwth % 

20% 
20% 
33% 
51% 
41% 
13% 
8% 
Scenario Model:




Scenarios, FY11 3/12E 


3 Yr Avg 
FY09 3/10 
FY10 3/11 
Bad  Street 
Base 
Best 
Rev 
¥640,874 
¥587,459 
¥692,953 
¥752,784 
¥710,825 
¥647,674 
2 Yr Rev Grwth Rate 



13% 
10% 
5% 
EBIT % 
10.8% 
13.3% 
15.9% 
16.5% 
11.5% 
10.5% 
EBIT 
¥69,251 
¥78,342 
¥110,481 
¥124,209 
¥81,745 
¥68,006 
EBITDA 
¥102,710 
¥108,722 
¥107,527 
¥167,709 
¥125,245 
¥111,506 
Capex 
¥33,693 
¥29,359 
¥65,000 
¥45,000 
¥45,000 
¥45,000 
EBITDA  CapEx 
¥69,016 
¥79,363 
¥85,691 
¥122,709 
¥80,245 
¥66,506 
EPS 
¥197 
¥373 
¥496 
¥583 
¥381 
¥310 







EV/EBITDA  CapEx 

17.1x 
14.2x 
11.0x 
11.0x 
10.0x 
Price Target 



¥8,840 
¥5,620 
¥4,120 
Implied P/E 

20.1x 
15.1x 
15.2x 
14.7x 
13.3x 
Implied EV/EBITDA 

11.3x 
8.1x 
8.4x 
7.6x 
6.6x 







Return 



18% 
25% 
45% 
Up/down: 



2.5x 









Probability 



30% 
40% 
30% 
Wtd Avg Price Target 



¥6,136 


Bad / Street: 13% total rev growth (assumes 5 yr avg 11% HDD unit growth continues and pricing is 5%) for 6% base rev growth annually. Rest of revenue (90B Yen) comes from acquisitions, assuming a similar rev multiple as paid for EMR motors (and using the cash from the Nov '10 100B convert issue). On EBIT % margin, street assumes growth (above mgmt guidance for a decline) and that the acquired revenue is close to Nidec average EBIT % margin.
Base: Assumes 8% HDD unit growth , 5% pricing for 3% base rev growth (+ the same amount acquired revenue). Assume EBIT% margin contraction to near 3 year average.
Best: Assumes 3% HHD unit growth, 5% pricing, + same amount of acquired revenue. Assumes additional ~50bp of EBIT % pressure in the HDD business and that acquired revenue (~13% of mix) is EBIT margin dilutive in a similar amount to the EMR motors acquisition. (~400bp lower margin x 13% of mix).
CapEx & D&A assumpions used were from conversation w/ IR.
Comps:























P/E 



EV / EBITDA 




Price 
Mkt Cap 
Net Debt 
EV 

FY10 
FY11 
FY12 

FY10 
FY11 
FY12 

Nidec 
6594 JP 
¥7,500 
¥1,088,063 
¥4,227 
¥1,214,962 

15.1x 
13.0x 
12.1x 

8.1x 
7.2x 
6.6x 
















Japanese HDD Food Chain Comps: 












TDK, 100% HDD 
6762 JP 
¥4,825 
¥622,869 
¥53,129 
¥676,070 

12.4x 
10.7x 
9.7x 

4.4x 
4.2x 
4.0x 

NHK ~50% HDD 
5991 JP 
¥646 
¥152,941 
¥26,867 
¥179,939 

8.6x 
7.9x 
7.7x 

3.5x 
3.4x 
3.1x 
















U.S. HDD Companies: 













Western Digital 
WDC 
$27.90 
$6,557 
$2,334 
$4,223 

7.7x 
6.6x 
6.7x 

2.6x 
2.6x 
2.4x 

Seagate 
STX 
$11.49 
$5,745 
$13 
$5,732 

5.6x 
5.1x 
4.7x 

3.1x 
2.8x 
2.9x 
















MidSized / Appliance Motors Comps: 












Baldor 
BEZ 
$41.42 
$1,971 
$1,110 
$3,080 

24.0x 
16.7x 
14.2x 

9.8x 
8.4x 
7.7x 

RegalBeloit 
RBC 
$56.43 
$2,198 
$101 
$2,316 

13.6x 
11.9x 
10.7x 

6.9x 
6.1x 
5.7x 







































EV / EBITDA  CapEx 


GP % 
EBIT % 
Rev Grwth 







FY10 
FY11 
FY12 

CY09 
CY09 
TTM 
Last Qtr 
Nidec 
6594 JP 





10.6x 
11.8x 
10.2x 

26% 
13% 
4% 
38% 















Japanese HDD Food Chain Comps: 













6762 JP 





7.6x 
7.0x 
6.3x 

24% 
3% 
11% 
52% 

5991 JP 





5.1x 
4.9x 
4.4x 

13% 
5% 
8% 
45% 















U.S. HDD Companies: 














WDC 





4.9x 
4.8x 
4.1x 

24% 
15% 
32% 
66% 

STX 





4.7x 
4.1x 
4.3x 

28% 
16% 
16% 
42% 















MidSized / Appliance Motors Comps: 













BEZ 





11.5x 
9.6x 
8.6x 

29% 
12% 



RBC 





7.6x 
6.7x 
6.2x 

23% 
9% 


Catalyst
H1 9/10 earnings report on 10/26 & the possibility of lower revised guidance.
Further confirmation of weak PC volumes in 2H from companies in the value chain.
Description
Thesis: We believe that a great migration from HDDs to flashbased / SSDbased devices has begun. This makes Nidec a great secular short as it is the last member of the HDD food chain to retain a growth valuation (best case ~5% normalized FCF yield). A near term catalyst could be Octend earnings, where management will likely have to revise its aggressive 4Q unit guidance lower (based on very negative recent datapoints in the PC & HDD supply chain). Strong cannibalization of HDDbased notebook demand by the iPad and other tablets, which to date, all use Flashbased memories (NAND) and not HDDs, will result in lower PC volumes and greater price competition in notebooks / HDDs. This should eventually create volume headwinds and more than usual pricing pressure for component suppliers. As a result, Nidec will miss out year consensus numbers and/or see multiple compression, as it trades at a very large premium to the public HDD manufacturers (STX and WDC). We have passed the critical point of flash being cost competitive with HDDs on 64G  128G consumer notebooks, and Nidec has admits that as much as 50% of the end markets for its motors are in consumer devices. The power consumption, speed, and stability benefits of SSD are allowing it to being to cannibalized the enterprise HDD sector as well.
Description: ~65% of Nidec's EBIT comes from selling HDD motors and other PC components (cooling fans, etc.). This is the company's highest margin business (~18% EBIT margin vs overall Co. at 13 % margin), and it is dominated by "brushless" (electronic) / spindle motors that go into standard 2.5" (notebook) and 3.5" (desktop) HDDs. This motor technology has not significantly changed since the 80s. Nidec's HDD market share was ~60% in 2004 and has gradually increased (to close to 80%) through the downturn w/ industry capacity reductions. There is not an outsized #2 competitor, but Minebea and Alphana Technology have competing HDD motors. As a % of HDD motor sales, Nidec's sales split mirrors the HDD industry: STX is 31%, WDC is 30%, Hitachi is 21%, and Samsung and Toshiba are the other two significant customers. The majority of Nidec's HDD motor sales are conducted justintime, with quarterly pricing. Even though Nidec has 80% market share in HDD motors, it is continuing to cut prices 12% q/q every quarter, in order to "stay on the good side of the HDD co's" (Nidec's HDD motor ASPs are ~$5 on an average total HDD ASP of ~$45). Recent talk of 10%+ HDD ASP declines for 4Q puts significant pressure on Nidec to increase the size of its quarterly price cuts.
The rest of Nidec's operating income is: ~15% optical components (digital camera shutter and lens components for cameras / phones); ~10% machinery automation components (industrial robot applications); and the remainder is "midsized" motors (home appliances, automotive systems, etc.) Nidec has ambitious plans to significantly increase its nonHDD motors business through acquisitions (recently paid ~$760M / ~10.5x EBIT to acquire EMR's appliance and tools motors business, a ~7% EBIT margin business postsynergies).
Mkt Cap is $13.4B USD, EV is ~$15B USD (PF for a recent $720M cash acquisition from EMR), and revs are ~$8.3B USD. Liquidity is ~$90M USD /day.
Updated analyst estimates of the HDD market are well below Nidec's last guidance #'s for the overall market:
HDD Unit Forecasts, Million Units of Sales






Cal 3Q10

Cal 4Q10

Comment


Nidec's 7/23 Guidance

170

185








Gartner's 9/10 Lowered Estimate

165

172



Barclays 9/10 Lowered Estimate

165

172

Lowered 4Q from 177.

Avian's 9/15 Lowered Estimate

160


Would be a "near flat" comparison to Q2.




Normal seasonality is +1015%.

Average

163

172








Nidec's Divergence from Updated Avg Estimates

4%

8%



On top of this, street EPS estimates for FY10 3/11 of ¥502 are already ¥50 higher than Nidec's EPS guidance of ¥452. The street is assuming that Nidec's guidance is conservative and also likely estimating future acquired revenues.
Tablet PCs could be an incremental 2530M units of demand next year, erasing 1/3 of the 1012% average HDD unit growth rate over the last 5 years. In the last few weeks, RSH and some U.S. HDD co.'s have mentioned greaterthanexpected 2H PC unit weakness, partially from consumers delaying purchases to assess the new tablet PC offerings. BBY's CEO mentioned on 9/15 that iPads alone had cannibalized as much as of 50% PC volumes: (
http://online.wsj.com/article/SB10001424052748703376504575491533125103528.html?KEYWORDS=retailers+turn+to+gadgets#printMode). That would be a much more draconian scenario in consumer HDD volumes than what is needed to make this short work.
Valuation on Street Estimates:










Yen 
USD 






Price 
¥7,500 







Shrs Out 
145.1 







Mkt Cap 
¥1,088,063 
$13,109 















Add: Debt 
¥131,601 







Add: Minority Int 
¥59,592 







Add: New Convert Debt 
¥100,000 

Note: 0% interest rate, strike is ~40% premium for ~6.5% dilutive effect. 
Gross Debt 
¥231,601 
$2,790 















Less: Cash 
¥127,374 







Less: EMR Motors Deal Prc 
¥63,080 
$760 






Less: Cash from New Convert 
¥100,000 







Gross Cash 
¥164,294 
$1,979 






EV 
¥1,214,962 
$14,638 






Note: Net Debt 
¥67,307 
$811 












Street 
Street 
Street 

FY 3/2006 
FY 3/2007 
FY 3/2008 
FY 3/2009 
FY 3/2010 
FY 3/2011 
FY 3/2012 
FY 3/2013 
Revs 
¥536,858 
¥629,667 
¥742,126 
¥613,458 
¥587,459 
¥692,953 
¥752,958 
¥800,915 









Gross Profit 
¥123,846 
¥143,040 
¥158,216 
¥130,565 
¥151,122 



% Sales 
23.1% 
22.7% 
21.3% 
21.3% 
25.7% 












EBIT 
¥53,426 
¥64,009 
¥76,833 
¥51,806 
¥78,342 
¥110,481 
¥124,444 
¥134,828 
% Sales 
10.0% 
10.2% 
10.4% 
8.4% 
13.3% 
15.9% 
16.5% 
16.8% 









EBITDA 
¥79,711 
¥94,006 
¥113,167 
¥83,953 
¥107,527 
¥150,691 
¥167,784 
¥184,024 









EBITDA  CapEx 
¥36,526 
¥54,862 
¥77,507 
¥45,452 
¥70,919 
¥85,691 
¥122,784 
¥139,024 
FCF (NI + D&A  CapEx) 
¥24,049 
¥30,785 
¥41,830 
¥21,999 
¥44,538 
¥34,579 
¥66,198 
¥71,862 
CapEx 
¥43,185 
¥39,144 
¥35,660 
¥38,501 
¥36,608 
¥65,000 
¥45,000 
¥45,000 
Net Income 
¥40,949 
¥39,932 
¥41,156 
¥28,353 
¥51,961 
¥70,394 
¥82,013 
¥87,677 
EPS 

¥276 
¥284 
¥197 
¥373 
¥496 
¥578 
¥620 


















Multiples 








EV / Revs 




2.1x 
1.8x 
1.6x 
1.5x 
EV / EBIT 




15.5x 
11.0x 
9.8x 
9.0x 
EV / EBITDA 




11.3x 
8.1x 
7.2x 
6.6x 
EV / EBITDA  CapEx 




17.1x 
14.2x 
9.9x 
8.7x 
P / E 




20.1x 
15.1x 
13.0x 
12.1x 
EV / FCF 




27.3x 
35.1x 
18.4x 
16.9x 









Growth 








Sales Grwth % 

17% 
18% 
17% 
4% 
18% 
9% 
6% 
EBIT Grwth % 

20% 
20% 
33% 
51% 
41% 
13% 
8% 
Scenario Model:




Scenarios, FY11 3/12E 


3 Yr Avg 
FY09 3/10 
FY10 3/11 
Bad  Street 
Base 
Best 
Rev 
¥640,874 
¥587,459 
¥692,953 
¥752,784 
¥710,825 
¥647,674 
2 Yr Rev Grwth Rate 



13% 
10% 
5% 
EBIT % 
10.8% 
13.3% 
15.9% 
16.5% 
11.5% 
10.5% 
EBIT 
¥69,251 
¥78,342 
¥110,481 
¥124,209 
¥81,745 
¥68,006 
EBITDA 
¥102,710 
¥108,722 
¥107,527 
¥167,709 
¥125,245 
¥111,506 
Capex 
¥33,693 
¥29,359 
¥65,000 
¥45,000 
¥45,000 
¥45,000 
EBITDA  CapEx 
¥69,016 
¥79,363 
¥85,691 
¥122,709 
¥80,245 
¥66,506 
EPS 
¥197 
¥373 
¥496 
¥583 
¥381 
¥310 







EV/EBITDA  CapEx 

17.1x 
14.2x 
11.0x 
11.0x 
10.0x 
Price Target 



¥8,840 
¥5,620 
¥4,120 
Implied P/E 

20.1x 
15.1x 
15.2x 
14.7x 
13.3x 
Implied EV/EBITDA 

11.3x 
8.1x 
8.4x 
7.6x 
6.6x 







Return 



18% 
25% 
45% 
Up/down: 



2.5x 









Probability 



30% 
40% 
30% 
Wtd Avg Price Target 



¥6,136 


Bad / Street: 13% total rev growth (assumes 5 yr avg 11% HDD unit growth continues and pricing is 5%) for 6% base rev growth annually. Rest of revenue (90B Yen) comes from acquisitions, assuming a similar rev multiple as paid for EMR motors (and using the cash from the Nov '10 100B convert issue). On EBIT % margin, street assumes growth (above mgmt guidance for a decline) and that the acquired revenue is close to Nidec average EBIT % margin.
Base: Assumes 8% HDD unit growth , 5% pricing for 3% base rev growth (+ the same amount acquired revenue). Assume EBIT% margin contraction to near 3 year average.
Best: Assumes 3% HHD unit growth, 5% pricing, + same amount of acquired revenue. Assumes additional ~50bp of EBIT % pressure in the HDD business and that acquired revenue (~13% of mix) is EBIT margin dilutive in a similar amount to the EMR motors acquisition. (~400bp lower margin x 13% of mix).
CapEx & D&A assumpions used were from conversation w/ IR.
Comps:























P/E 



EV / EBITDA 




Price 
Mkt Cap 
Net Debt 
EV 

FY10 
FY11 
FY12 

FY10 
FY11 
FY12 

Nidec 
6594 JP 
¥7,500 
¥1,088,063 
¥4,227 
¥1,214,962 

15.1x 
13.0x 
12.1x 

8.1x 
7.2x 
6.6x 
















Japanese HDD Food Chain Comps: 












TDK, 100% HDD 
6762 JP 
¥4,825 
¥622,869 
¥53,129 
¥676,070 

12.4x 
10.7x 
9.7x 

4.4x 
4.2x 
4.0x 

NHK ~50% HDD 
5991 JP 
¥646 
¥152,941 
¥26,867 
¥179,939 

8.6x 
7.9x 
7.7x 

3.5x 
3.4x 
3.1x 
















U.S. HDD Companies: 













Western Digital 
WDC 
$27.90 
$6,557 
$2,334 
$4,223 

7.7x 
6.6x 
6.7x 

2.6x 
2.6x 
2.4x 

Seagate 
STX 
$11.49 
$5,745 
$13 
$5,732 

5.6x 
5.1x 
4.7x 

3.1x 
2.8x 
2.9x 
















MidSized / Appliance Motors Comps: 












Baldor 
BEZ 
$41.42 
$1,971 
$1,110 
$3,080 

24.0x 
16.7x 
14.2x 

9.8x 
8.4x 
7.7x 

RegalBeloit 
RBC 
$56.43 
$2,198 
$101 
$2,316 

13.6x 
11.9x 
10.7x 

6.9x 
6.1x 
5.7x 







































EV / EBITDA  CapEx 


GP % 
EBIT % 
Rev Grwth 







FY10 
FY11 
FY12 

CY09 
CY09 
TTM 
Last Qtr 
Nidec 
6594 JP 





10.6x 
11.8x 
10.2x 

26% 
13% 
4% 
38% 















Japanese HDD Food Chain Comps: 













6762 JP 





7.6x 
7.0x 
6.3x 

24% 
3% 
11% 
52% 

5991 JP 





5.1x 
4.9x 
4.4x 

13% 
5% 
8% 
45% 















U.S. HDD Companies: 














WDC 





4.9x 
4.8x 
4.1x 

24% 
15% 
32% 
66% 

STX 





4.7x 
4.1x 
4.3x 

28% 
16% 
16% 
42% 















MidSized / Appliance Motors Comps: 













BEZ 





11.5x 
9.6x 
8.6x 

29% 
12% 



RBC 





7.6x 
6.7x 
6.2x 

23% 
9% 


Catalyst
H1 9/10 earnings report on 10/26 & the possibility of lower revised guidance.
Further confirmation of weak PC volumes in 2H from companies in the value chain.
Messages

Subject  RE: thoughts on results 
Entry  11/03/2010 09:26 PM 
Member  gary9 
Results confirmed the thesis in several respects. But who says short selling rewards being correct? I guess it got too popular and went against the crowd at least in the short term. 