July 4, 2024
Top 10 Stock Western Digital Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Western Digital – Top 10 Stock in NASDAQ 100 Index
Western Digital is listed as a top 10 stock on July 04, 2024 in the market index NASDAQ 100 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for Western Digital on July 04, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Technology Hardware & Peripherals |
| Index | Human Rights, Recycling, NASDAQ 100, NASDAQ, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Western Digital Strong Buy
| 360 METRICS | July 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| SENTIMENT | ||||||||
| SENTIMENT | 36 |
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| 360° VIEW | ||||||||
| 360° VIEW | 76 |
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ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Western Digital are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Western Digital. The consolidated Value Rank has an attractive rank of 57, which means that the share price of Western Digital is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 57% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 99, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 36. Professional investors are more confident in 64% other stocks. Worryingly, the company has risky financing, with a Safety rank of 43. This means 57% of comparable companies have a safer financing structure than Western Digital. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, Western Digital is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 57 and the Growth Rank above-average at 99, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 36. In addition, the company financing structure is on the riskier side (Safety Rank of 43). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Western Digital only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 36 (better than 36% compared with alternatives), overall professional sentiment and engagement for the stock Western Digital is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Western Digital. Analyst Opinions are at a rank of 60 (better than 60% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 59 which means that currently, stock research experts are getting even more optimistic about investments in Western Digital. But Market Pulse has a low rank of 16, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 84% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 47, which means that, currently, professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 36 (less encouraging than 64% compared with investment alternatives), Western Digital has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Western Digital Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 57 (better than 57% compared with alternatives), Western Digital shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Western Digital. Price-to-Sales (P/S) is 59, which means that the stock price compared with what market professionals expect for future sales is lower than for 59% of comparable companies, indicating a good value regarding Western Digital's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 83% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 68. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Western Digital (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 57, is a buy recommendation based on Western Digital's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Western Digital Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, Western Digital shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Western Digital. Sales Growth has a value of 98, which means that, currently, professionals expect the company to grow more than 98% of its competitors. The same is valid for Profit Growth with a value of 89 and for Capital Growth with 89. In addition, Stock Returns had an above-average rank value of 96, which means they have been higher than 96% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Western Digital exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Western Digital Debt Financing Safety below-average
| SAFETY METRICS | July 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 44 |
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| REFINANCING | ||||||||
| REFINANCING | 48 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 57 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 43 |
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ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Western Digital has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Western Digital is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Western Digital. Liquidity is at 57, meaning the company generates more profit to service its debt than 57% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 48, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 52% of its competitors. Leverage is also high at a rank of 44, which means that the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Western Digital has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Western Digital Top Financial Performance
| COMBINED PERFORMANCE | July 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Western Digital (Technology Hardware & Peripherals, USA) shares have much better financial characteristics than comparable stocks. Shares of Western Digital are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), show above-average growth (Growth Rank of 99) but are riskily financed (Safety Rank of 43), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Western Digital's financial characteristics. As the company Western Digital's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 57) and above-average growth (Obermatt Growth Rank of 99), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 43) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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