Micron (MU)

[Fundy_]

(Quote slightly edited to summarize this post in a few sentences).

Micron is up roughly ~40% since I made this thread, it's still at an ~11 P/E and, in my view, significantly undervalued. This morning it is now down nearly 7% in PM based on an unwarranted downgrade by Goldman. The downgrade was based on Samsung stating they are increasing DRAM supply, but it is an internal increase, not an external increase. Samsung has already stated they won't increase supply just to take market share, nor will they increase supply if it does not continue to be profitable to them. This could be a fantastic buying opportunity.

The downswing continued and, putting my money where my mouth is, I added 410 shares at $29.40 about a week after I posted the quote above and planned to add another ~400 shares if it went below $29, which it never did. As an obligatory update, it has risen nearly all the way back to $33.32, nearing its all time high of $34.85. The trailing P/E is currently at 10.94 and concensus EPS for 2015 is $3.55. Assuming a more fair P/E of 15 at the 2015 concensus (which I believe is very lowballed), it presents a 59.8% upside to $53.25. There have been many indications by all involved in the oligarchy that the (external) supply will remain limited as the demand is growing, allowing for continued price control. The iPhone 6 is also going to be great for Micron, given that they are the primary supplier of DRAM for Apple. The current concensus price target of the 26 analysts posted to Yahoo is $38.69, which presents a 16.1% upside.