STX - bizarrely valued

Seagate Technology Holdings (STX) Q4 earnings were very reasonable, although the market was greatly displeased with the outlook for 2013. STX closed -9% @ $33.90. The near term trend is likely to show continued weakness, but the current valuation is arguably very low.


STX, daily

Summary

So, Mr Market decided to slam STX 9% lower. The earnings weren't great, but they certainly weren't bad either.

see Key stats, via yahoo! finance

Debt remains low..and cash just about matches debt. Profit margins are very good, although future revenues aren't set for some magical ramp anytime soon.


Price outlook

In terms of stock price, there will be very strong support in the 31/29 zone. Of course that is almost a further 9% or so lower.  On any basis, it would be very surprising if STX put in a few daily closes <29.


Possibilities ahead?

A straight forward take-over seems very viable. Would STX ever consider a merger with its primary rival Western Digital (WDC) ?

Regardless, Seagate is ticking along pretty well, and they should be fine across the longer term.