4-Star Stocks Poised to Pop: SanDisk

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, flash memory specialist SanDisk (NAS: SNDK) has earned a respected four-star ranking.

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

SanDisk facts

Headquarters (Founded)Milpitas, Calif. (1988)
Market Cap$9.2 billion
IndustryComputer storage and peripherals
Trailing-12-MonthRevenue$5.23 billion

Co-Founder/CEO Sanjay Mehrotra

CFO Judy Bruner

Return on Capital (Average, Past 3 Years)6.6%
Cash/Debt$2.7 billion / $1.8 billion

Micron Technology (NAS: MU)

Sony (NYS: SNE)


Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93% of the 2,099 members who have rated SanDisk believe the stock will outperform the S&P 500 going forward. These bulls include jeffgnewman and MagicDiligence.

Just last month, jeffgnewman succinctly summed up the SanDisk bull case: "Far too cheap, growth in tablets, growth in new markets, price stabilization for flash memory."

In fact, SanDisk sports a cheapish forward P/E of 8.4. That represents a discount to competitors like Micron (10.6), Sony (12.9), and STEC (10.5).

CAPS member MagicDiligence elaborates on the bargain opportunity:

The two big growth markets in consumer electronics are smartphones and tablets. Both are built on flash memory. A major trend in PCs is toward ultra-thin designs, like Apple's (AAPL) Macbook Air. Those designs depend on flash memory (not hard drives) for storage. SSD flash drives are an important part of data center design due to their speed and low power requirements. SanDisk is the purest play in flash memory. Revenues are growing at near 20% annual rates, and margins have improved sustainably due to a shift into product-embedded flash rather than consumer SD cards. So why is this cyclical stock selling at historically low price-to-sales multiples? It doesn't add up.

What do you think about SanDisk, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackSanDisk?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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