4-Star Stocks Poised to Pop: Western Digital

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, disk drive specialist Western Digital (Nasdaq: WDC) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Western Digital's business and see what CAPS investors are saying about the stock right now.

Western Digital facts

Headquarters (founded)Irvine, Calif. (1970)
Market Cap$9.4 billion
IndustryComputer storage and peripherals
Trailing-12-Month Revenue$12.5 billion
ManagementCEO John Coyne (since 2007)
CFO Wolfgang Nickl (since 2010)
Return on Equity (average, past 3 years)24.6%
Cash / Debt$3.2 billion / $2.2 billion
Dividend Yield2.6%
CompetitorsEMC
Seagate Technology
Toshiba

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 1,367 members who have rated Western Digital believe the stock will outperform the S&P 500 going forward.

A few months ago, one of those bulls, Murkyl, kindly addressed some of the concerns surrounding Western Digital:

[A] lot of talk about solid state drives overtaking hard disk storage. ... What some people don't get is that even with tablets and the cloud, hard disk usage actually goes up. All that cloud storage has to go somewhere and hard disks are still the only viable cost effective solution and barring any radical breakthrough, will continue to be so for at least 5-10 years. ... Another point about hard disks is that even with lower unit counts to the PC space, what matters a lot [is] the enterprise space where disk margins are much better. ... I believe the purchase of Hitachi's disk division was a brilliant move that will help [Western Digital's] margins in the coming quarters.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Western Digital may not be your top choice.

If that's the case, we've compiled a special free report for investors called "The 3 Dow Stocks Dividend Investors Need," which uncovers a few other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow theTrackPoisedToCAPS account.

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