AIA Group Ltd Makes New Investment in Western Digital Corporation $WDC

Key Points

• AIA Group initiated a position in Western Digital, buying 6,923 shares worth approximately $3.15 million in the third quarter. Institutional investors and hedge funds own 92.51% of the company’s shares.
• Western Digital reported quarterly EPS of $4.64, beating estimates of $4.11, while revenue rose 55.5% year over year to $4.38 billion. The company also raised its quarterly dividend from $0.15 to $0.175 per share.
• Analysts give the stock a “Moderate Buy” consensus rating, with an average price target of $591.04; however, shares have recently declined, and coverage cites valuation and technology-execution risks.

AIA Group Ltd bought a new position in Western Digital Corporation (NASDAQ:WDC - Free Report) in the third quarter, according to its most recent filing with the SEC. The firm bought 6,923 shares of the data storage provider's stock, valued at approximately $3,146,000.

A number of other hedge funds have also modified their holdings of WDC. Mowery & Schoenfeld Wealth Management LLC acquired a new position in shares of Western Digital in the second quarter worth about $28,000. Dunhill Financial LLC purchased a new position in Western Digital in the 2nd quarter valued at $29,000. Stonehage Fleming Financial Services Holdings Ltd acquired a new position in Western Digital during the second quarter worth about $31,000. Gables Capital Management Inc. purchased a new stake in shares of Western Digital in the second quarter valued at approximately $32,000. Finally, Valley National Advisers Inc. increased its stake in shares of Western Digital by 182.6% in the 3rd quarter. Valley National Advisers Inc. now owns 65 shares of the data storage provider's stock worth $30,000 after acquiring an additional 42 shares during the last quarter. 92.51% of the stock is owned by institutional investors and hedge funds.

Western Digital Trading Down 6.8%

WDC opened at $323.83 on Thursday. The stock's 50-day moving average price is $414.74 and its 200 day moving average price is $418.54. Western Digital Corporation has a 12-month low of $132.43 and a 12-month high of $799.87. The firm has a market cap of $121.22 billion, a price-to-earnings ratio of 12.57, a PEG ratio of 1.23 and a beta of 2.27.

Western Digital (NASDAQ:WDC - Get Free Report) last released its earnings results on Thursday, October 22nd. The data storage provider reported $4.64 earnings per share for the quarter, beating the consensus estimate of $4.11 by $0.53. Western Digital had a return on equity of 55.62% and a net margin of 69.20%. The company had revenue of $4.38 billion during the quarter, compared to the consensus estimate of $4.14 billion. During the same period in the previous year, the company posted $1.78 EPS. Western Digital's revenue was up 55.5% compared to the same quarter last year. On average, research analysts forecast that Western Digital Corporation will post 23.62 earnings per share for the current year.

Western Digital Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, December 17th. Investors of record on Friday, December 4th will be paid a dividend of $0.1750 per share. This represents a $0.70 annualized dividend and a yield of 0.2%. The ex-dividend date of this dividend is Friday, December 4th. This is an increase from Western Digital's previous quarterly dividend of $0.15. Western Digital's payout ratio is currently 2.33%.

Analysts Set New Price Targets

Several equities analysts have recently commented on WDC shares. Citigroup decreased their price target on Western Digital from $740.00 to $660.00 and set a "buy" rating on the stock in a research note on Friday, October 23rd. Summit Insights cut shares of Western Digital from a "buy" rating to a "hold" rating in a research report on Thursday, August 6th. Morgan Stanley set a $668.00 price target on shares of Western Digital and gave the company an "overweight" rating in a research note on Friday, October 23rd. UBS Group reissued a "buy" rating and issued a $625.00 price target on shares of Western Digital in a research note on Friday, October 23rd. Finally, Argus decreased their price objective on shares of Western Digital from $600.00 to $500.00 and set a "buy" rating on the stock in a report on Monday, October 26th. One analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and six have given a Hold rating to the company's stock. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $591.04.

Western Digital News Summary

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital’s latest earnings beat expectations, and its second-quarter outlook points to further margin growth. Strong pricing, demand for higher-capacity hard drives, and cloud and AI storage needs are cited as key supports. Western Digital’s Q1 beat and Q2 outlook
• Neutral Sentiment: Some analysts view the recent pullback as a potential buying opportunity given earnings growth and cloud demand, though opinions are tempered by risks. Is the dip a buying opportunity?
• Negative Sentiment: Storage and memory shares sold off amid concerns about memory pricing and uncertainty around the U.S. election, even as the broader tech market rallied. Cautious commentary from a flash-memory maker also pressured the group, with concerns spilling over to WDC despite its hard-drive focus. Sector pressure from election and memory-price worries
• Negative Sentiment: Investors are also weighing WDC’s premium valuation and the risk of executing its HAMR hard-drive technology roadmap, which could limit confidence despite strong results. Valuation and execution risks

Insider Buying and Selling at Western Digital

In other Western Digital news, insider Vidyadhara Gubbi sold 1,795 shares of the firm's stock in a transaction that occurred on Friday, September 4th. The shares were sold at an average price of $459.87, for a total value of $825,466.65. Following the completion of the transaction, the insider owned 80,571 shares of the company's stock, valued at $37,052,185.77. This trade represents a 2.18% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this link. Also, CEO Irving Tan sold 20,000 shares of the business's stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the completion of the transaction, the chief executive officer owned 575,966 shares of the company's stock, valued at approximately $256,287,591.02. This trade represents a 3.36% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 25,436 shares of company stock valued at $11,340,064 in the last 90 days. Company insiders own 0.20% of the company's stock.

About Western Digital

Western Digital Corporation NASDAQ: WDC is a data storage technology company that develops and manufactures hard disk drives (HDDs) and related storage solutions. Its products are used in data centers, cloud infrastructure, enterprise systems, personal computers, gaming platforms and external storage devices.

The company offers HDD-based products for business and consumer applications, including high-capacity drives designed for hyperscale and cloud data centers, enterprise storage environments, network-attached storage systems and personal computing.

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