In the video below, Motley Fool analysts Andrew Tonner and Jim Mueller discuss three reasons why it could be time to sell Seagate Technology .

The first issue Jim sees is how generous the company is in its options and its stock-based compensation plan. Option dilution is significant with this company, and It spends a lot of cash flow keeping that in check and reducing its share count.

Second, there seems to be a global slowdown in demand for storage space with PCs, and even the cloud storage spaces have downward pressure. This has lead to a lot of short-term pressures.

The third potential reason to sell Seagate is the rise of solid-state drives. Hard disk technology is still very cheap, but solid state drives are getting very good. If Seagate can get into SSDs, this could create more upside for the company. 

Though Seagate pays a significant dividend and has the cash flow to support it, the demand for digital memory has put pressure on margins. Is Seagate worthy of your investment dollars? The Motley Fool answers this question and more in our most in-depth Seagate research available for smart investors like you. You, like thousands of others, can gain instant access to your own premium ticker report by clicking here now.

The article 3 Reasons It Could Be Time to Sell Seagate originally appeared on

Andrew Tonner has no positions in the stocks mentioned above. Jim Mueller owns shares of and Western Digital and has the following options: long JAN 2014 $20 calls on Facebook. The Motley Fool owns shares of, Facebook, Fusion-io, and Western Digital and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend and Facebook. 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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Add a Comment

*0 / 3000 Character Maximum