Flash storage: more promise
Unlike the hard drive makers, SanDisk Corporation (NASDAQ:SNDK) issued solid guidance for the current quarter. Instead of guiding on the consensus of $1.49 billion in revenue, SanDisk thinks it can generate revenue as high as $1.575 billion. In the last quarter, prices for NAND flash continued to be strong. This helped the flash drive maker report a gross margin of 46.7%. This represents an 18.4% improvement compared to last year.
The company earned $1.21 per share, beating estimates by a full $0.28 per share. Sales grew 43% year-over-year to $1.48 billion.
Foolish bottom line
Every time investors speculated that hard drives were just commodities, the underlying companies sold off. Western Digital Corp. (NASDAQ:WDC)and Seagate Technology PLC (NASDAQ:STX) then traded to new heights. It might be time to consider that these companies reached a peak. By selling these shares, investors could focus on the NAND flash market, which has better growth characteristics. Demand for flash storage is still growing, thanks to a sustainable growth in demand for mobile devices like smartphones. This implies that the pullback in shares of SanDisk should be viewed as a buying opportunity.
Chris Lau has no position in any stocks mentioned. The Motley Fool owns shares of Western Digital..
The article Sell These Storage Makers, Buy This One originally appeared on Fool.com.
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