This article was first published in Citywire Wealth Manager on 11 February 2022.
With Valentine’s Day around the corner, several leading investors reflect on the investments that have stolen their hearts in recent times.
Jacob Mitchell: Founder and chief investment officer, Antipodes Partners
Seagate is a leading provider of hard disk drives, an underappreciated part of the connected economy as the world becomes more data intensive. The hard disk drive sector endured a prolonged period of weak performance as other forms of data storage took market share in PCs and laptops, due to faster speeds.
However, while demand for hard disk drives from PCs and laptops is shrinking, demand from datacentres for Seagate’s much larger mass data storage solutions has been growing rapidly.
In fact, datacentres will account for the majority of Seagate’s revenue from next year, so it is a company pivoting from a zero-growth business to one that will see revenues grow by 3-10% per year.
The company is valued at just 10x forward earnings, which is a very attractive multiple given secular growth trends around computer and data storage, improving competitive dynamics between the sector’s two leading players, and the quality of Seagate’s business and growth profile.
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