What do you think of Valero (VLO) and Sandisk (SNDK) for long positions?

Question

What do you think of Valero (VLO) and Sandisk (SNDK) for long positions?

Answer 1

Can't say much for VLO, but I used to be long SNDK for a painful while...

SNDK has two problems...

Their NAND business is a commodity - no two ways about that, so they will always gain / suffer from changes in supply and demand for those chips.  Generally, NAND flash will be used in more and more computers and devices.  The problem, is that too many suppliers have gotten involved in this business and the demand isn't where it needs to be.  So the industry really needs to consolidate and gain some pricing power, but no one seems capable of doing so.

The other problem with SNDK is that they are trying to differentiate themselves from being just a commodity NAND producer.  They chose to be a consumer electronics company and use their NAND expertise in those devices.  Well, as you can see from AAPL, what is most important is to be a leader in producing products consumers want.  SNDK's devices (i've owned a few!) may be #2 behind AAPL (Sansa mp3 vs. iPod) but it's a world of difference - they aren't even in the same league.

So, NAND market is a commodity with intense industry pressures, and consumer electronics are extremely difficult to do WELL and the industry is extremely competitive.

I owned SNDK when it was a $50 stock believing it could be a leader in NAND and do well as a #2 in consumer electronics.  Finally sold at $30.

Answer 2

ETRADE, I would look into DFR , HTOG, and GTX as some cheaper stocks that you are sure to make money on  and get a substantial amount of stocks. Please read up on these stocks before investing, but they have an outlandish amount to be made off a small investment..Now is time with stocks so low, it will bounce up, this country is in serious trouble, soon as the war stops and we get a new president in office things can only sky rocket. People need to realize as well, to buy American.  All this free trade c**p is destroying our country. I say build alternative energy and stop relying on other countries so much and we will be back in great shape. Just my opionion, research before doing anything.