Western Digital Sees Unusually Large Options Volume (NASDAQ:WDC)

Key Points

• Western Digital experienced a significant surge in call options trading, with 76,361 call options purchased, marking a 473% increase over its typical daily volume.
• Research analysts are optimistic about the company, with 18 analysts rating it as a buy and an average price target set at $74.47.
• The company announced a $0.10 quarterly dividend with a yield of 0.51% and initiated a $2 billion share repurchase program indicating confidence in its stock valuation.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) was the target of unusually large options trading on Thursday. Stock investors bought 76,361 call options on the company. This represents an increase of 473% compared to the typical daily volume of 13,317 call options.

Wall Street Analysts Forecast Growth

A number of research analysts recently weighed in on WDC shares. Barclays set a $50.00 price objective on Western Digital and gave the company an "overweight" rating in a research report on Thursday, May 1st. Wall Street Zen assumed coverage on Western Digital in a research note on Friday, May 2nd. They set a "hold" rating on the stock. Summit Insights upgraded Western Digital from a "hold" rating to a "buy" rating in a research note on Wednesday, April 30th. Loop Capital restated a "buy" rating on shares of Western Digital in a research note on Tuesday, May 6th. Finally, Susquehanna lowered their target price on Western Digital from $72.00 to $40.00 and set a "neutral" rating on the stock in a research report on Friday, April 11th. Four research analysts have rated the stock with a hold rating and eighteen have assigned a buy rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $74.47.

Western Digital Stock Performance

NASDAQ:WDC traded up $6.99 during mid-day trading on Thursday, hitting $78.42. The stock had a trading volume of 18,298,521 shares, compared to its average volume of 8,036,775. The stock has a market capitalization of $27.36 billion, a price-to-earnings ratio of 14.85 and a beta of 1.54. The company has a 50 day simple moving average of $61.11 and a 200-day simple moving average of $53.69. Western Digital has a 52 week low of $28.83 and a 52 week high of $78.78. The company has a current ratio of 1.56, a quick ratio of 1.31 and a debt-to-equity ratio of 0.95.

Western Digital (NASDAQ:WDC - Get Free Report) last released its 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 business had revenue of $2.61 billion for the quarter, compared to the consensus estimate of $2.45 billion. Western Digital had a net margin of 13.33% and a return on equity of 20.58%. The firm's quarterly revenue was up 30.0% compared to the same quarter last year. During the same period last year, the firm posted $1.44 earnings per share. On average, research analysts expect that Western Digital will post 4.89 earnings per share for the current fiscal year.

Western Digital Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, September 18th. Investors of record on Thursday, September 4th will be given a dividend of $0.10 per share. This represents a $0.40 dividend on an annualized basis and a yield of 0.51%. Western Digital's dividend payout ratio (DPR) is currently 7.58%.

Western Digital announced that its Board of Directors has initiated a share repurchase program on Tuesday, May 13th that permits the company to buyback $2.00 billion in shares. This buyback authorization permits the data storage provider to buy up to 11.7% of its stock through open market purchases. Stock buyback programs are generally a sign that the company's leadership believes its stock is undervalued.

Insider Buying and Selling at Western Digital

In related news, SVP Gene M. Zamiska sold 1,729 shares of the business's stock in a transaction on Thursday, June 5th. The stock was sold at an average price of $54.88, for a total transaction of $94,887.52. Following the sale, the senior vice president directly owned 40,089 shares in the company, valued at approximately $2,200,084.32. The trade was a 4.13% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Irving Tan sold 11,379 shares of the company's stock in a transaction dated Tuesday, May 13th. The stock was 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 owned 605,481 shares in the company, valued at $29,178,129.39. This represents a 1.84% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold a total of 13,353 shares of company stock valued at $657,454 in the last quarter. 0.30% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Western Digital

A number of hedge funds have recently added to or reduced their stakes in the stock. Private Wealth Management Group LLC grew its stake in shares of Western Digital by 102.5% during the 2nd quarter. Private Wealth Management Group LLC now owns 399 shares of the data storage provider's stock worth $26,000 after acquiring an additional 202 shares in the last quarter. Zions Bancorporation National Association UT bought a new position in shares of Western Digital in the first quarter valued at $29,000. CNB Bank bought a new position in shares of Western Digital in the second quarter valued at $37,000. Allworth Financial LP grew its stake in shares of Western Digital by 34.1% in the first quarter. Allworth Financial LP now owns 955 shares of the data storage provider's stock valued at $38,000 after buying an additional 243 shares in the last quarter. Finally, Elequin Capital LP bought a new position in shares of Western Digital in the fourth quarter valued at $40,000. Institutional investors own 92.51% of the company's stock.

About Western Digital

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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