Why SanDisk Corporation Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of flash-memory chip specialist SanDisk Corporation popped 10% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock had pulled back over the past few weeks on valuation concerns, but yesterday's Q1 results -- earnings soared 62% on a revenue increase of 13% -- and upbeat outlook are quickly easing those worries. In fact, solid-state drive sales -- accounting for about 30% of its business -- spiked 61% over the year-ago period while gross margin expanded to a record 49.7%, giving analysts plenty of good vibes over its product positioning going forward.


Now what: Management now sees current-quarter revenue of $1.550 billion-$1.625 billion, versus the average analyst estimate of $1.583 billion. "We are excited by the momentum we are building in our business as we continue to execute on our growth initiatives," said Sanjay Mehrotra. More importantly, with SanDisk still sporting a solid balance sheet and reasonable PEG of around 1, the downside might be limited enough to bet those prospects.

More compelling long-term opportunities
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal "The Motley Fool's 3 Stocks to Own Forever." These picks are free today! Just click here now to uncover the three companies we love. 

The article Why SanDisk Corporation Shares Soared originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing Like Warren Buffett

Learn from one of the world's best investors.

View Course »

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Add a Comment

*0 / 3000 Character Maximum