STEC, Inc - (formerly SimpleTech, Inc.) (STEC)

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STEC rides the high-end of disk drives - Barron's
Sun Apr 5, 2009 2:32pm EDT Email | Print | Share| Reprints | Single Page[-] Text [+]
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More Business & Investing News... NEW YORK, April 5 (Reuters) - Despite a worldwide downturn in the disk-drive business, Disk drive maker STEC stock has more than doubled because it has set its sights on the high-end, Barron's said.

The company has a lock on the most expensive kind of drive, which it sells for thousands of dollars to makers of storage equipment for large corporations, such as EMC Corp (EMC.N), according to an article in the April 6 edition of Barron's.

While many companies, including SanDisk Corp (SNDK.O) and Korean giant Samsung (005930.KS) sell storage containing flash chips to consumers, STEC sells to only large storage-equipment makers and in small quantities, Barron's said.

STEC trades at 17.4 times 2009 earnings estimates, and 11.5 times 2010 forecasts, Barron's said. Yet profit is expected to rise by 51.6 percent this year to 47 cents per share.

This year is expected to be the worst on record for disk-drive makers, with sales falling by 15 percent. Yet shipments of flash drives like those STEC sells are expected to rise 227 between 2007 and 2012, Barron's said, citing research firm IDC.

STEC shares on Friday closed at $8.34, more than double the price of its 12-month low of $3.42 seen in December. (Reporting by Ilaina Jonas, editing by Martin Golan)