The Computer Storage Device industry is red hot, according to the latest Zacks Industry Ranks.
This 11-company strong group scored a #29 out of 265 rank, up +18 spots in recent weeks. Covering analysts granted 13 EPS upgrades and just 2 downgrades. The average size of EPS revisions was +13%.
Bulls have a compelling long-term growth case. Underlying EPS fundamentals for consistent computer storage growth remain excellent. Information storage needs have doubled roughly every 3 years! A study in Scienceestimated the world's technological capacity to store information in analog and digital devices grew from less than 3 (optimally compressed) exabytes in 1986, to 295 (optimally compressed) exabytes in 2007.
Imagine where that is now, and where it is going…
In 2014, IDC said that the amount of data would grow to 2.16 zettabytes worldwide. By 2016, it will have grown to 3.77 zettabytes.
Moving from exabytes to zettabytes – you’ve got to love this exotic language. As remarkable as we are at creating data, storage technology has kept up.
Data storage is the fastest growing semiconductor technology. Tape storage, hard disk drives and solid-state storage have doubled about every 12 to 18 months.
According to Techopedia, storage devices form one of the core components in any computing device. Computer Storage Devices store virtually all the data and applications on a computer, except hardware/firmware.
Two types of Computer Storage Devices exist:
1. Primary Storage Devices:Generally smaller in size, these are designed to hold data temporarily and are internal to the computer. They have the fastest data access speed, and include RAM and cache memory.
2. Secondary Storage Devices:These usually have large storage capacity, and they store data permanently. They can be both internal and external to the computer, and they include the hard disk, compact disk drive and USB storage device.
I list the top 3 Zacks Ranked Computer Storage Device companies, in order of market capitalization (large-cap first, mid-cap next, and small-cap last).
Surprisingly, the share valuation story looks solid across this niche. This is a key metric -- advocating for joining the bullish ranks now.
(1) Seagate Technology PLC (STX - Free Report) ) -- This is a Zacks #2 Rank (BUY) stock with a Zacks VGM score of B. Shares price around $35.
STX is a large-cap stock at $10.5 billion in market capitalization. Valuation is OK here. The PEG ratio is 3.48 and a Price to Sales ratio of 0.95. The avg. of the last 4 EPS surprises is -0.36%. The dividend is quite substantial at $2.52 a share or +7.2% annually.
Seagate Technology PLC offers a portfolio of hard disc drives, solid-state drives and solid-state hybrid drives. It offers a range of disk drive products for the enterprise, client compute and client non-compute market applications. The Company also provides data storage services for businesses, including online backup, data protection and recovery solutions.
Seagate Technology PLC is headquartered in Dublin, Ireland.
(2) Super Micro Computer (SMCI - Free Report) ) -- This is a Zacks #2 Rank (BUY) stock with a Zacks VGM score of B. Shares price around $22.
SMCI is a mid-cap stock at $1.05 billion in market capitalization. Valuation is great here. The PEG ratio is 1.30 and a Price to Sales ratio of 0.47. The avg. of the last 4 EPS surprises is +5.88%.
Super Micro Computer, Inc. designs, develops, manufactures and sells energy-efficient, application optimized server solutions based on the x86 architecture. The Company's solutions include a range of rack mount and blade server systems, as well as components.
Supermicro emphasizes superior product design and uncompromising quality control to produce industry-leading server boards, chassis and server systems.
(3) Datalink (DTLK) -- This is a Zacks #2 Rank (BUY) stock with a Zacks VGM score of A. Shares price around $10.
DTLK is a small-cap stock at $227 million in market capitalization. Valuation is great here. The PEG ratio is 1.36 and a Price to Sales ratio of 0.30. The avg. of the last 4 EPS surprises is +115%.
Datalink Corporation is an information storage architect. The company analyzes, designs, implements and supports information storage infrastructures that store, protect and provide continuous access to information.
Datalink's specialized capabilities and solutions span storage area networks, network-attached storage, direct-attached storage and IP-based storage, using industry-leading hardware, software and technical services.