Why Xyratex Is Poised to Bounce Back

Brian Pacampara, The Motley Fool
Updated

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, data storage specialist Xyratex has earned a respected four-star ranking.

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

Xyratexfacts

Headquarters (founded)

Havant, U.K. (1966)

Market Cap

$291.6 million

Industry

Computer storage and peripherals

Trailing-12-Month Revenue

$1.1 billion

Management

Interim CEO Ernest Sampias

CFO Richard Pearce

Return on Equity (average, past 3 years)

15.8%

Cash/Debt

$92.8 million / $0

Dividend Yield

2.8%

Competitors

Dot Hill Systems

EMC

Teradyne


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

On CAPS, 93% of the 274 members who have rated Xyratex believe the stock will outperform the S&P 500 going forward.

Just last month, one of those bulls, All-Star Staka, offered a balanced take on the Xyratex opportunity:

Positive:
-Fundamentally cheap with much higher earnings potential, no debt, good dividend
-Activist investor will drive profitability, brings in a new CEO, even selling the company seems possible
-New ClusterStor family should drive future growth even if current core business is deflating

Negative:
-Weakness in core business limits the available time frame for the entrance into the new cluster storage business

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

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The article Why Xyratex Is Poised to Bounce Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of EMC. 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 Motley Fool has a disclosure policy.

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