SanDisk Surges On Acquisition News, Analyst Comments (SNDK, STX, WDC, OCZ, STEC, EMC, NTAP)

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DATA STORAGE INVESTING IDEAS

• Popular long ideas: EMC, SNDK, STX
• Popular short ideas: SNDK, WDC, STEC
• Top dividend plays: STX, XRTX, WDC
• Pro favorites: EMC, SNDK, WDC

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Billions of gigabytes of data are saved using the hard drives and storage solutions provided by these firms

• Analysts Hammer STEC Following Weak Guidance (STEC, OCZ, FIO, EMC, NTAP, STX, WDC)
• SanDisk, Western Digital Lift Data Storage Stocks (SNDK, WDC, STX, EMC, STEC, NTAP, OCZ)
• Seagate Slammed By Margin Concerns, Rare Earths Prices (STX, WDC, OCZ, EMC, NTAP, SNDK, STEC, MCP)

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Avg. Market Cap:	$6.6B
Avg. P/E Ratio:	16.9
Avg. Div Yield:	0.5%

Shares of flash memory drive maker SanDisk (SNDK) are surging 6% today on news the company will pay $327 million in cash and some equity-based incentives for privately held Pliant Technology, a maker of enterprise solid state drives (SSD). The deal is expected to close by the end of SanDisk’s fiscal second quarter.

The news is giving a lift to the Data Storage Stocks Index, which is up 1% today. “Flash memory is making significant inroads into the enterprise by dramatically increasing application performance and reducing power consumption,” said SanDisk CEO Sanjay Mehrotra in a statement.

“The Enterprise SSD market is poised for considerable growth, with revenue projected to reach $4.2 billion in 2015, up from $994 million in 2010,” according to Joseph Unsworth, research director at Gartner, the companies said in the statement.

Morgan Stanley is also out with some bullish comments on SanDisk, raising its 2011 EPS estimate on the company to $5.46 from $4.97 and its 2012 estimate to $6.28 from $7.31. The firm issued a 2013 EPS estimate of $9.90. Morgan Stanley raised its price target on SanDisk to $65 from $70 while reiterating a bull case target of $100 for 2012.

Looking at other data storage names, Seagate Technology (STX) and Western Digital (WDC) are both off 1%. OCZ Technology Group Inc. (OCZ) is surging 5% while STEC Inc. (STEC) is up 3%. EMC (EMC) and NetApp (NTAP) are both fractionally lower.

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Tags: EMC, NTAP, OCZ, SNDK, STEC, STX, WDC