SanDisk (SNDK): The King of Flash

By Timothy Lutts, Chiel Investment Strategist and Editor of Cabot Stock of the Month Report
From Cabot Wealth Advisory 5/5/10 Sign up for free Cabot Wealth Advisory e-newsletter

SanDisk (SNDK) is a stock that has appeared in Cabot Top Ten Report 15 times over the past seven years.

One of those was on March 22 of this year, when Mike Cintolo wrote the following:

“SanDisk is the ultimate feast-or-famine chip stock. Its products are basically commoditized-flash memory-and fall in price most years. However, the flash storage business topped out well ahead of the economy, and thus the industry was slashing capacity even before the 2008 and early 2009 meltdown. That left the industry short of supply … just as demand was picking up! The biggest driver of this demand is the surge in smart phone usage—an iPhone, for example, uses much more memory than a standard cell phone-though the bigger picture is that, in the years ahead, untold amounts of data will be stored on possibly billions of consumer devices. In terms of bits stored, the industry could ship seven times as much within the next few years! Of course, long-term projections in this sector are not advised, yet the fact remains that SanDisk is firing on all cylinders right now.”

When that was published, SNDK was trading at 34. Since then, it’s climbed to 44, thanks to a crackerjack earnings report (it earned 95 cents per share, while analysts had projected 59) and then pulled back to 34 at last Thursday’s low. But now it’s back up at 41, showing that institutions are still in buying mode.  As long as this persists, I think short-term investments in SNDK (the King of Flash) will work.”

Editor’s Note: If you’d like Mike’s latest opinion on Sandisk (SNDK), as well as immediate access to future recommendations of Cabot Top Ten Report, I suggest you take a look here: Information on Cabot Top Ten Report

Tim LuttsTimothy Lutts

President, Chief Investment Strategist, Editor of Cabot Stock of the Month

Timothy Lutts heads one of America’s most respected independent investment advisory services, publishing eight newsletters to more than 165,000 subscribers around the world. Tim leads a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems. Under his leadership, Cabot has been honored numerous times by both Timer Digest and the Hulbert Financial Digest as among the top investment newsletters in the industry. Tim also edits Cabot Stock of the Month.