It seems like a trap to me. PE of 6 is fantastic but the future of HDD is not good.
I was looking at upgrading my computer the other month and SSD drive prices are down aroung $0.50 / GB. That is not good enough for a primary drive but the price per GB will just continue to come down. If I could get a 400 GB drive for $99 there would be no question about it, I'd get SSD and that would be it.
Look at it this way, SSD have 2-4 x the performance, they are more shock resistant, they are much better at handling random access which will continue to come our way with parallel processing, tech people just consider them better all around. The price right now is $0.50 per GB, with Moore's law doubling capacity every 2 years, in 10 years it will be $0.50 / 32 GB or $1 / 64GB. So $99 is a 6 TB SSD. Now yes, you could probably get a 50-100 TB HDD for that price but at some point people just don't need the capacity anymore.
Over the past decade we had first audio, and then video drive hard drive space requirements. Audio is already not an issue for most SSD drives and certainly within a decade video won't be much of an issue. With 6 TB you can store 1200 HD movies. For backing up your files you can already get 64GB usb sticks for like $40, in 10 years they will be 1 TB sticks for $40. For personal files what more do you really need? Sure, there will be the odd person who just has to have every episode of every tv show or movie they will ever watch, plus 200 -300 games and needs 50 TB storage but I just don't think that's the norm. There will also be corporations with huge data requirements but even then there are are only so many of them and I don't know that they would replace the home market. At the same time, I am an IT guy and the current generation of servers is the last that I want without SSD, the next one it just won't be an issue. We already are not using up the HDD space and when I can get 1TB SSD, with the performance advantage it's a non issue. Basically in the future I see HDD being used by hobbyists and businesses and while there will still be large numbers sold it just won't compare to what we have right now in terms of volume.
Right now they are selling ballpark 300-400 M HDD drives based on a quick google search. The forecasts I saw called for that number to drop in half over the next few years, who knows where it will be in a decade.
If my thesis is correct and the industry erodes over the next decade I just don't see how you make money on the stock. If everything went perfect for 10 years, you made the PE of 6 each year and every penny went back to shareholders you would get a 66% return over a decade + liquidation value which isn't even that great. However there are bound to be ups and down over the decade that hit profits and as this plays out there could be a lot of down periods with sales dropping followed by industry members losing their self-control and trying to grab market share from the dwindling pot. I could just see it getting really ugly.
Sorry for the pessimism, feel free to rip my argument to shreds. :P