Featured stock of the week: Applied Materials

Despite the recent drop following Q1 2018 #earnings, Applied Materials, $AMAT, still looks like an attractive investment idea.

The reported earnings show very good growth in both the top and the bottom line, however the analysts were put off by the guidance provided during the conference call.

From a valuation point of view, the stock still looks cheap with a PEG ratio (5 years expected) well below unity as you can appreciate from Yahoo Finance.

Now that the stock is trading below the 200 days moving area it may be a good idea to see whether and how this sudden drop is temporary or the start of a downtrend prior to initiating any position or accumulating.

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An example of an undervalued computer hard disk drive manufacturers stock

If you look at the valuation of Western Digital ($WDC) these days you will find that the stock is very undervalued. According to YahooFinance it has a PEG ratio (5 years) of 0.2 !

As regards technical performance, the stock has lagged behind lately and is currently trading below its 20, 50 and 100 days moving average:

Western Digital Technical Analysis Chart | WDC | US9581021055 | 4-Traders

Value investing requires patience: even though the stock is trading at a discount with regards to projected future earning, timing is of the essence and one would need to watch if the market recognizes the value of Western Digital before starting a position.