Insights

These 2 Nasdaq PC Stocks Are Seeing Action Tuesday

The stock market made further advances on Tuesday afternoon, adding to modest gains from Monday. As of 1:15 p.m. ET today, the Nasdaq Composite (NASDAQINDEX: ^IXIC) was higher by about two-thirds of a percent, clawing back some ground after extensive losses in April.
Within the Nasdaq, you’ll find plenty of technology stocks, including several that focus on products that PC owners use regularly. Big gains for Western Digital (NASDAQ: WDC) reflected an interesting twist for the maker of flash memory and hard-drive data storage devices. Meanwhile, peripherals maker Logitech International (NASDAQ: LOGI) told investors about its latest financial results. You’ll find the details below.
Image source: Getty Images.

Western Digital gets an interesting offer
Shares of Western Digital jumped more than 15% Tuesday afternoon. The data storage specialist has been a perennial value stock, but activist investors are looking to do something about that.
Early this morning, investors at Elliott Investment Management sent a letter to Western Digital’s board of directors, calling for aggressive action to unlock shareholder value. Elliott specifically called for a full strategic review of the business, with the recommendation that Western Digital spin off its flash memory business to separate it from its old-school hard-drive segment.
What made the letter interesting, though, was that Elliott put more of its money behind the message. The activist investor company said it would offer $1 billion in equity capital to invest on the flash side of the business, with the intent of valuing it at $17 billion to $20 billion. That’s relatively close to the current enterprise value of the entire company, implying that Elliott sees no real value in the hard-drive business.
Digital transformation has put new life into the data storage business, and even hard drives have been valuable resources for enterprises looking to store vital information. However, Elliott is adamant that flash is the future for Western Digital, and many shareholders hope that the storage specialist will heed the letter’s advice and capitalize on what they hope could be an opportunity to double the value of the stock within the next year and a half.
Logitech loses some ground
Elsewhere in tech, shares of Logitech International were down 2%. The Nasdaq-listed maker of computer peripherals and accessories saw a minor slowdown from an extremely lucrative period, but its long-term prospects still appear to be intriguing.
Logitech worked hard to try to keep up with its breakneck pace from last year. Revenue for the 2022 fiscal year, ending March 31, was up 4% to $5.48 billion, representing a new record for the company. However, adjusted earnings fell 28% to $4.63 per share. The slowdown was even more pronounced when you look at quarterly results, where sales fell 20% year over year and adjusted operating income dropped by more than half.
Also weighing on the stock was Logitech’s cut to its fiscal 2023 guidance. With the company ceasing operations in Russia and Ukraine, Logitech now expects its sales to rise just 2% to 4%, and adjusted operating income will be about $25 million less than previously predicted.
Logitech was a big beneficiary of the work-from-home trend during the worst of the pandemic, as workers had to pony up for equipment to get things done. With that one-time boost behind the company, Logitech now has to look for ways to keep capitalizing on changing trends while still demonstrating the value of its products both to at-home folks and to business professionals.
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Logitech International. The Motley Fool has a disclosure policy. –

The stock market made further advances on Tuesday afternoon, adding to modest gains from Monday. As of 1:15 p.m. ET today, the Nasdaq Composite (NASDAQINDEX: ^IXIC) was higher by about two-thirds of a percent, clawing back some ground after extensive losses in April.

Within the Nasdaq, you’ll find plenty of technology stocks, including several that focus on products that PC owners use regularly. Big gains for Western Digital (NASDAQ: WDC) reflected an interesting twist for the maker of flash memory and hard-drive data storage devices. Meanwhile, peripherals maker Logitech International (NASDAQ: LOGI) told investors about its latest financial results. You’ll find the details below.

Image source: Getty Images.

Western Digital gets an interesting offer

Shares of Western Digital jumped more than 15% Tuesday afternoon. The data storage specialist has been a perennial value stock, but activist investors are looking to do something about that.

Early this morning, investors at Elliott Investment Management sent a letter to Western Digital’s board of directors, calling for aggressive action to unlock shareholder value. Elliott specifically called for a full strategic review of the business, with the recommendation that Western Digital spin off its flash memory business to separate it from its old-school hard-drive segment.

What made the letter interesting, though, was that Elliott put more of its money behind the message. The activist investor company said it would offer $1 billion in equity capital to invest on the flash side of the business, with the intent of valuing it at $17 billion to $20 billion. That’s relatively close to the current enterprise value of the entire company, implying that Elliott sees no real value in the hard-drive business.

Digital transformation has put new life into the data storage business, and even hard drives have been valuable resources for enterprises looking to store vital information. However, Elliott is adamant that flash is the future for Western Digital, and many shareholders hope that the storage specialist will heed the letter’s advice and capitalize on what they hope could be an opportunity to double the value of the stock within the next year and a half.

Logitech loses some ground

Elsewhere in tech, shares of Logitech International were down 2%. The Nasdaq-listed maker of computer peripherals and accessories saw a minor slowdown from an extremely lucrative period, but its long-term prospects still appear to be intriguing.

Logitech worked hard to try to keep up with its breakneck pace from last year. Revenue for the 2022 fiscal year, ending March 31, was up 4% to $5.48 billion, representing a new record for the company. However, adjusted earnings fell 28% to $4.63 per share. The slowdown was even more pronounced when you look at quarterly results, where sales fell 20% year over year and adjusted operating income dropped by more than half.

Also weighing on the stock was Logitech’s cut to its fiscal 2023 guidance. With the company ceasing operations in Russia and Ukraine, Logitech now expects its sales to rise just 2% to 4%, and adjusted operating income will be about $25 million less than previously predicted.

Logitech was a big beneficiary of the work-from-home trend during the worst of the pandemic, as workers had to pony up for equipment to get things done. With that one-time boost behind the company, Logitech now has to look for ways to keep capitalizing on changing trends while still demonstrating the value of its products both to at-home folks and to business professionals.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Logitech International. The Motley Fool has a disclosure policy.

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