Update: WDC and JD

JD and WDC have both been cut in half over the course of the year.

In this 3Q 2018 Commentary FPA Capital Fund look at the bear case on WDC more closely. They lay out the four main drivers of the bear thesis and “rebut” by claiming:

  • this NAND cycle is different
  • gross margin declines are real, but expect them to be more muted
  • stock price bounces back before EPS bottoms
  • company now has a buyback budget

Hayden Capital in his 3Q 2018 Letter to investor provides an update on JD:

  • Richard Liu’s corporate character is at odds with his personal character
  • JD is run like a military, and “lacks data-driven creativity”
  • Long-term thesis is intact; growth is strong, especially if margins head in the right direction.
  • Backing out Logistics and Finance, the core retail operation is trading extremely cheap.

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