This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.
Walk into any electronics store or exhibition and you’ll see this brand, especially in the data storage section.
This brand is well-known among heavy data users as its products and services are reliable.
In fact, you may even be using the products and services by this company in your laptop and phone.
This company is Western Digital Corporation.
Brief History of Western Digital Corporation
Founded in 1970 as a mean opinion score test equipment manufacturer, Western Digital Corporation pivoted.
It shifted its focus to manufacture specialty semiconductors, and released its first product in 1971.
Soon after, it grew to become the largest independent calculator chips manufacturer.
Through innovation, business partnerships, and acquisitions, Western Digital Corporation owns more than 14,000 patents, and the brand Sandisk.
Today, Western Digital Corporation produces external and internal hard disks, solid-state drives, provides storage platforms, cloud storage, and more.
With this innovative culture and business acumen, how has Western Digital Corporation performed financially?
Business Model and Financials
Western Digital Corporation enjoyed fantastic growth in 2017 where its total revenue soared by 46% to $19b!
However Western Digital Corporation hadn’t been able to replicate this feat over the years, with its total revenue stuck between $16.5b to $20.6b.
This doesn’t look good.
Shall we have a look at its net income to evaluate its profitability?
Western Digital Corporation’s net income had been growing till 2018 before the company registered losses amounting to $754m and $250m in 2019 and 2020 respectively.
Things improved in 2021 as its net income swung back into the black, recording $821m.
2022’s figure came in better at $1.5b!
Looks like Western Digital Corporation’s net income is healthy and strong!
Overall, its total revenue is a cause for concern even as its profitability rises.
With this weighing on the minds of investors and traders, is this company worth a position trade?
Let’s have a look at its price chart to conclude.
Technical Analysis on Western Digital Corporation (NASDAQ: WDC)
From the chart of Western Digital Corporation, you can see that the market has been brutal on its stock.
You can tell that the market is still bearish on this stock from the number of red candles as opposed to the number of blue candles.
In addition, there’s a red arrow just above its latest candle, signaling fresh bearish sentiment.
Hence, the question in your mind – should you take a short position trade on Western Digital Corporation now?
To answer this question, let’s have a look at the color of the bar of the Trend Impulse Factor indicator.
Presently, the bar isn’t in dark green, indicating that this bearish move may not continue for long.
Although the share price of Western Digital Corporation is trending lower, its shares isn’t ripe for a short position trade yet.
Just not yet.
Western Digital Corporation has been and continues to be innovative. One main worry is its inability to grow its total revenue.
It’s tempting to jump into a short position trade on Western Digital Corporation’s shares now, especially when there’s a fresh bearish sentiment.
However, it pays to wait as the indicators (red arrow and Trend Impulse Factor) that form the TradersGPS (TGPS) system have been tested and proven.
Trading stocks without a proper system can be highly risky.
The TGPS system can determine if a stock is ready for action to be taken so that you don’t have to feel in the dark and make wild guesses.
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