After a big refresh cycle in 2014, when many corporations and consumers were buying new desktop workstations and laptops, the landscape has drastically changed. That was all but over in the first quarter of this year, and companies that rely on personal computer (PC) sales got hammered. A new report from RBC says that channel checks indicate the June-quarter sales are tracking below expectations, and it could be a case of here we go again.

In the report, the RBC team thinks that four stocks in the firm’s coverage list could experience weakness due to the softer than normal PC sales environment. If that is so, you can bet investors that own the stocks will not be thrilled. One bright side is that this could bode well for the second half of the year, and weakness in the stock could be a buying opportunity.

Here are the four stocks that RBC covers that could see a direct impact.

CDW

The company had a very large secondary stock offering last fall that added to the free float. CDW Corp. (NASDAQ: CDW) came back from private equity land with a highly anticipated initial public offering and has gone straight up in price for almost two years. CDW provides information technology (IT) products and services to business, government, education and health care customers in the United States and Canada. It offers discrete hardware and software products to integrated IT solutions, such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.

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The RBC team notes the company has 20% of its business exposed to the U.S. market, with no revenue to speak of outside North America.

CDW investors a paid a small 0.7% dividend. The stock is rated Outperform with a $40 price target at RBC. The Thomson/First Call consensus price target is $40.80. Shares closed Friday at $36.72.
Hewlett-Packard

This old-school tech stock may offer investors tremendous value now, but if PC sales come in light again, the stock could get hit hard. Hewlett-Packard Co. (NYSE: HPQ) does a large percentage of its business overseas, and the dollar strength, combined with a slowing PC market, has hurt the stock over the past six months. Trading at a very cheap nine times estimated 2015 earnings, the stock truly offers a value proposition for investors interested in technology.

The RBC team feels that weak demand in PC shipments will directly negatively hit the company’s revenue and free cash flow. They, like others on Wall Street, feel that most likely the weakness is already built into the company’s guidance. Any share gains the company could show could help to offset PC weakness.

HP investors are paid a 2.17% dividend. The RBC price target on the stock, which is rated Sector Perform, is $37. That is below the $40.65 consensus target. The stock closed Friday at $32.41.

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Seagate Technology

Is still down sharply from the highs posted late last year, and some insiders have been selling stock recently. Seagate Technology PLC (NASDAQ: STX) and the other hard disk drive (HDD) stocks took a hit during first-quarter earnings season and are just now starting to bounce back. Seagate’s sizable stock repurchase program may help to put some support under the stocks. With 40% of the HDD market, the company may have issues in the second quarter if the soft PC demand translates to lower HDD units being shipped.

Seagate investors are paid a very solid 4.03% dividend. RBC has the stock rated Outperform with a $64 price objective. The consensus target is $64.32. Shares closed Friday at $53.55.

Western Digital

This is another leader in the total addressable HDD market at a very impressive 44%, and like Seagate could experience lower shipments if PC trends stay the same through the balance of the quarter. Western Digital Corp. (NASDAQ: WDC) attributed much of the gain in revenue growth in recent quarters to the consumer electronics/gaming unit, which saw the biggest upside last year, shipping 10.9 million units, up 67% year over year. This could help temper the PC decline.

The RBC analysts point out that PC shipment trends thus far in 2015 do not bode well for HDD vendors that are looking to try to reach their 2015 total shipment growth targets, which are currently in the low single digits

Western Digital investors are paid a 2.1% dividend. RBC has the stock rated Outperform with a $109 price target, but the consensus estimates is higher at $115.71. Shares closed the trading day Friday at $93.01.

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Given the downturn in some of the stocks in the report, one would think that some on Wall Street are anticipating the same decline the RBC analysts are projecting. It may make sense to continue to watch these top companies for any sign of a reversal, and then buy partial positions. With the bottom perhaps this summer, and Windows 10 on the way, this could turn into a solid buying opportunity.

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