Short Interest in Western Digital Corporation (NASDAQ:WDC) Expands By 370.2%

Key Points

• Short interest in Western Digital Corporation skyrocketed by 370.2% in July, reaching a total of 33 million shares, indicating increased bearish sentiment among investors.
• The company reported strong quarterly earnings with $1.66 earnings per share, surpassing estimates, along with a 30% year-over-year revenue increase to $2.61 billion.
• Western Digital's Board of Directors approved a $2 billion share buyback plan, reflecting confidence in the company's current stock value.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) was the target of a large growth in short interest in July. As of July 15th, there was short interest totaling 33,010,000 shares, agrowthof370.2% from the June 30th total of 7,020,000 shares. Based on an average daily volume of 6,440,000 shares, the days-to-cover ratio is currently 5.1 days. Based on an average daily volume of 6,440,000 shares, the days-to-cover ratio is currently 5.1 days.

Western Digital Price Performance

Shares of NASDAQ WDC opened at $76.55 on Friday. The firm has a market cap of $26.71 billion, a P/E ratio of 14.86 and a beta of 1.58. Western Digital has a twelve month low of $28.83 and a twelve month high of $78.80. The company has a quick ratio of 1.31, a current ratio of 1.08 and a debt-to-equity ratio of 0.47. The company has a 50 day moving average of $62.22 and a 200 day moving average of $53.83.

Western Digital (NASDAQ:WDC - Get Free Report) last posted its quarterly earnings results on Wednesday, July 30th. The data storage provider reported $1.66 earnings per share for the quarter, topping the consensus estimate of $1.48 by $0.18. The firm had revenue of $2.61 billion during the quarter, compared to analysts' expectations of $2.45 billion. Western Digital had a return on equity of 24.93% and a net margin of 14.13%. The company's revenue was up 30.0% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.44 earnings per share. As a group, research analysts expect that Western Digital will post 4.89 EPS for the current fiscal year.

Western Digital announced that its Board of Directors has initiated a share repurchase plan on Tuesday, May 13th that authorizes the company to buyback $2.00 billion in outstanding shares. This buyback authorization authorizes the data storage provider to reacquire up to 11.7% of its shares through open market purchases. Shares buyback plans are generally an indication that the company's leadership believes its stock is undervalued.

Western Digital Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, September 18th. Shareholders of record on Thursday, September 4th will be paid a dividend of $0.10 per share. The ex-dividend date is Thursday, September 4th. This represents a $0.40 annualized dividend and a yield of 0.5%. Western Digital's dividend payout ratio is currently 7.77%.

Analyst Ratings Changes

Several research analysts have recently issued reports on WDC shares. UBS Group increased their target price on Western Digital from $45.00 to $75.00 and gave the stock a "neutral" rating in a research report on Monday, July 21st. Wedbush raised their price objective on Western Digital from $78.00 to $90.00 and gave the company an "outperform" rating in a research report on Thursday. Citigroup boosted their target price on shares of Western Digital from $78.00 to $88.00 and gave the company a "buy" rating in a report on Thursday. Benchmark increased their price target on shares of Western Digital from $58.00 to $85.00 and gave the stock a "buy" rating in a research note on Thursday. Finally, BNP Paribas reissued an "outperform" rating on shares of Western Digital in a research note on Friday, May 16th. Four equities research analysts have rated the stock with a hold rating and eighteen have given a buy rating to the stock. According to data from MarketBeat, Western Digital has a consensus rating of "Moderate Buy" and an average target price of $78.74.

Insider Buying and Selling at Western Digital

In related news, CEO Irving Tan sold 11,379 shares of the stock in a transaction dated Tuesday, May 13th. The shares were sold at an average price of $48.19, for a total value of $548,354.01. Following the completion of the transaction, the chief executive officer directly owned 605,481 shares of the company's stock, valued at $29,178,129.39. This represents a 1.84% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, SVP Gene M. Zamiska sold 1,729 shares of the firm's stock in a transaction dated Thursday, June 5th. The stock was sold at an average price of $54.88, for a total transaction of $94,887.52. Following the completion of the sale, the senior vice president owned 40,089 shares of the company's stock, valued at $2,200,084.32. This trade represents a 4.13% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 13,353 shares of company stock valued at $657,454 over the last 90 days. Company insiders own 0.30% of the company's stock.

Institutional Trading of Western Digital

Large investors have recently made changes to their positions in the stock. Vanguard Group Inc. lifted its position in Western Digital by 1.1% during the first quarter. Vanguard Group Inc. now owns 42,938,495 shares of the data storage provider's stock valued at $1,736,003,000 after purchasing an additional 478,728 shares during the period. Alyeska Investment Group L.P. raised its stake in Western Digital by 130.0% during the 1st quarter. Alyeska Investment Group L.P. now owns 5,029,359 shares of the data storage provider's stock valued at $203,337,000 after buying an additional 2,842,822 shares during the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its holdings in shares of Western Digital by 23.7% during the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 4,592,516 shares of the data storage provider's stock valued at $273,852,000 after buying an additional 881,088 shares during the period. Northern Trust Corp lifted its holdings in shares of Western Digital by 1.5% during the 1st quarter. Northern Trust Corp now owns 3,449,811 shares of the data storage provider's stock valued at $139,476,000 after buying an additional 52,140 shares during the period. Finally, Deutsche Bank AG boosted its stake in shares of Western Digital by 107.1% in the 1st quarter. Deutsche Bank AG now owns 3,369,331 shares of the data storage provider's stock worth $136,222,000 after buying an additional 1,742,481 shares during the last quarter. 92.51% of the stock is currently owned by institutional investors.

Western Digital Company Profile

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications.

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