Micron (MU)

[Fundy_]

I really wish I had more time to dive into the many reasons this is a fantastic value investment, but I will have to be brief for now. I was planning on compiling a small report to post here but since todays rebound, I thought it best to inform you guys before it goes any higher. The company is Micron Technology, Inc. and they are a market leader in the DRAM / NAND memory semiconductor sector. They recently acquired Elpida, which was going bankrupt, and it has skyrocketed their profits and their market share. Their acquisition was not only good for Micron, but good for the industry as a whole, as the market is now an oligopoly, with Samsung, Micron, and SK Hynix controlling 90% of the market share. Margins have been improving and revenue is estimated to grow 10% annually for at least the next 5 years. Their current trailing P/E of 9 and forward P/E of 7.5 gives a huge upside. Of the 28 analysts reported on Yahoo Finance, the mean target price is $28.36 (29.4% upside) while the median target price is $30 (36.9% upside).

[admin]

Thanks Fundy, I'll have a look

[Fundy_]

Small update. As I mentioned previously, the industry is now an oligopoly, so each companies earnings will significantly effect the industry as a whole. Sandisk crushed earnings yesterday and are up nearly 6% PM with a new PT of $95 (18% upside) via Jefferies Group. This should have a small impact on Micron for the remainder of the week, but is fantastic news for the industry leading up to Microns ER, which should be released in the next 2 months.

• http://www.zacks.com/stock/news/129189/w...ngs-report
• http://www.estimize.com/mu

[admin]

The uptrend held

MU [NASD] Micron Technology Inc. Technology | Semiconductor- Memory Chips | USA

[Fundy_]

Hopefully I convinced some people to do a little DD and buy 3 days ago when I first posted, before the big upswing today. For any potential future investors, I still believe it is incredibly undervalued and there is a huge amount of room for an upswing. Micron is still only at a 9.93 P/E in comparison to Sandisks 19.02 P/E.

[admin]

By the way, great call, Fundy..

[Fundy_]

Micron is up roughly ~40% since I made this post, it's still at an ~11 P/E and, in my view, significantly undervalued. This morning it is now down nearly 7% in PM on no news. From what I can gather, Samsung posted their first quarterly loss in 3 years and it's causing a tech sell off, but MU is being hit the hardest. At this point I am not entirely sure if that's the reason, given Sandisk is only down 1.2% PM and they have a much higher P/E (19) than MU does. This could be a fantastic buying opportunity, but I would recommend waiting a few more hours to hear if there is any more news before pulling the trigger.

Edit: Seems that Goldman Sachs analyst Mark Delaney wrote something about DRAM capacity, which is the reason for the selloff, not the Samsung news. Unfortunately, no public copy of that report is online yet, so I have no idea how serious of an issue what he shared is, if serious at all. I'm not sure how some analyst would know something about DRAM capacity that Samsung, Micron, and Sandisk don't, because according to all news coming from them, supply is limited and demand is growing, giving the oligarchy more pricing power.

Edit 2: I have no idea why so many people were attributing the loss to Samsung earnings. They did indeed post a profit decline, but not a loss. They also posted stable supply and growing demand of DRAM, which is good for Micron. That rumor seems to have been started because people were looking for any explanation as to why Micron was dropping so significantly in pre market. The reason is definitely because of the GS downgrade, as mentioned in my first edit.

[ArtM72]

Russ Fischer is a really smart guy that posts from time to time on Seeking Alpha. He was a strong proponent for MU a couple of years back on IV's OVTI board. He is now very bullish on Intel.

In one of his latest posts (http://seekingalpha.com/article/2311335-...gh-margins) Russ talks about Intel and a very real possibility of its producing a DRAM on processor chip. Interesting read as it also talks a bit about MU and Samsung.

[admin]

Well, it still more than doubled in a year Fundy, congrats.

[ArtM72]

I see Fischer just wrote a new article for SA on MU. I'd check it out before jumping into MU at this time.

http://seekingalpha.com/article/2364705-micron-maybe-it-isnt-different-this-time?isDirectRoadblock=true&app=1&uprof=