Monday, August 20, 2012

Selling Seagate Technology STX

I am moving STX off my recommend list. This was on my "supplemental smartphone index" list I made up in response to Jim Cramer's Smartphone Index he introduced on Mad Money back on August 11, 2009. As my previous posts explain, I thought his original list of 21 names left out some good ones, so I picked a list of 9 supplemental choices. Originally, I had another 3 China domiciled names included, but I soon implemented a ban on all stocks reporting out of  The People's Republic - the "people" don't report there as much as the government. And I don't trust their reporting (Cramer has a similar ban, tolerating only BIDU). By the way, I made an error in my 2/18/12 post followup on the smartphone index. I had SYNA grouped with the 3 China stocks, CHU, CHA, NTE.

From the start of the index August, 2009, STX has returned +192% and still has a price/cash flow of only 4.7 and a PE of 4 ! I hate to sell something so cheap, it still looks good as this recent article over at Kiplinger attests. But it has evidence of a tiring climb, and a triple in 3 years probably already reflects a lot of good developments. If they move more forcefully into smartphone and cloud storage, there could still be a lot of climb left in this one.

I took ARMH out of the index on 3/7/12, so that leaves 7: LLTC, WRLS, SYNA, EA,OVTI, CREE, AKAM.


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