When a business essentially makes one product, it prospers when it makes versions of that product that allow other businesses to use it in many different ways. There is a hard drive maker in Lake Forest, California that has followed that growth formula for nearly 40 years. Its products are routinely found in a wide variety of business and consumer electronic devices that need to store and manipulate data.

Western Digital Corporation (NYSE: WDC) designs, develops, manufactures and markets hard drives. Its devices are used for non-volatile data storage in personal computers, servers, network storage, video game consoles, digital video recording devices and TV set-top boxes. The firm sells its products worldwide to manufacturers, distributors and such retailers as Amazon.com (NASDAQ: AMZN), Office Depot (NYSE: ODP) and Target (NYSE: TGT).

The company pleased investors last week, when it announced fiscal Q1 EPS of 58 cents and revenues of $1.77 billion. Analysts had been expecting 58 cents and $1.65 billion. Management also guided Q2 EPS to 73-77 cents (58 cent consensus) and Q2 revenues to $1.875-$1.925 billion ($1.774B consensus). Needham subsequently reiterated its "strong buy" rating on the issue. Caris, Brean Murray and BMO Capital Markets declared "buys." Price targets were boosted to the $30-$35 range. WDC shares popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the shares with six "strong buys," eight "buys" and five "holds." The WDC P/E ratio (11.75), PEG ratio (0.92), Price to Sales ratio (1.02), Price to Book ratio (3.49), Price to Cash Flow ratio (7.87), Price to Free Cash Flow ratio (20.69), Sales Growth rate (29.19%), EPS Growth rate (26.09%), Return on Assets (15.82%), Return on Investment (32.58%) and Return on Equity (34.65%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 84% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $16.21 and $29.45. A stop-loss of $24 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.