Seagate Technology (NASDAQ:STX) has been a tech-stock doubler in 2012, a tripler since 2011, and a good turnaround story.
Seagate is in recovery mode from heavy flooding in Thailand last year, which destabilized disk drive factories. The company has been steadily increasing prices on its products, and also buying back shares.
However, the stock price clearly reflects the positivity — and there’s still some headwinds to deal with. The company will be bracing itself against new competition as it moves into the crowded market for enterprise solutions. Another negative trend is the growth in tablets, which is taking market share away from traditional laptops and desktops. The result likely will be more pressure on hard drive demand.
The stock still trades at a low 5 times earnings, though, and STX still yields a plump 3.9% in dividends despite its rampant run-up, so it might not be time to fully exit Seagate — but you might want to at least lock in some of the profits while you can.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.