Western Digital: A Drive Buy

The hard disk drive maker has a strong balance sheet and is poised to capture greater market share. It has S&P's highest rating

We believe shares of Western Digital WDC: $20)—this week's focus stock—are compelling on a valuation basis, as its price-earnings ratio is below both the S&P MidCap 400 index and its peers. We're also encouraged by the company's broadening product line, as revenue from non-desktop PC sources accounted for 35% of the September-quarter total. It carries S&P's highest investment recommendation of 5-STARS, or strong buy.

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