Deutsche Bank Endorses Seagate and Western Digital (DB, STX, WDC, AVT, FLEX)

Deutsche Bank DB has released a report covering the performance of Electronics Supply Chain companies. A majority of the companies posted impressive Q1 earnings numbers and largely surpassed expectations. The companies also had higher operating margins. Telecom, networking and industrial companies performed especially well, however, the server and storage segment remained sluggish. Revenue growth on a year over year basis remained strong, but this was mainly due to easy comps. Average revenue growth for the sector was 18% y/y, lead by distributors and HDD makers. These segments tallied 26% and 20% Y/Y revenue growth respectively. Networking and telecom companies performed the best, followed by industrials. The report picked Seagate Technology STX and Western Digital Corp. WDC as its top two choices. It also endorsed Avnet Inc. AVT and Flextronics Int. Ltd. FLEX.