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

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From Barrons

November 24, 2009, 11:32 AM ET Stocks That Could Bring a Bounty in 2010

By James Altucher

It’s Thanksgiving and basically the year is over. If you’re working on any deals, it’s unlikely they will close before year-end. If you own stocks, you might have a nice run-up by the end of the year. But I’m most thankful for the stocks and economic realities that I think will drive performance in 2010.



2.) I’m thankful the company that has a monopoly on solid-state drives, STEC, recently collapsed. I had previously recommended STEC earlier this year at TheStreet.com when it was trading in the $5s. I then sold it in the $9s, only to watch it, sadly, go up to $42. In its recent earnings report STEC stated that its largest customer, EMC, was sitting on a pile of its inventory, suggesting that EMC might not be as large a customer in the coming year.

I expect that Apple (which already uses STEC drives in its Macbook Air, and I expect will use STEC in any tablet product), IBM, HP, and others will up their usage of solid-state drives and STEC. STEC is two years ahead of any competitor in the technology and basically has a monopoly in the space. With $2 per share in earnings expected next year, even with the problems with EMC, the company trades for barely six times next year’s earnings amid 20% growth. I own the shares here.

James Altucher is a managing partner of Formula Capital, an alternative asset-management firm, and an author on investment strategies.