Micron Tech (MU) Semiconductors Superstock Rank 99 $51.6 Mkt Cap
MU makes memory chips for the i phones as well as other uses and has a market distribution in Singapore,Japan,China, Malaysia, & Taiwan., not sure about the UK.
The Stocopedia numbers look good with a 98 Mom, 98 Growth and 79 Value ranking. as well as a Superstock classification.. It also has a sales growth of 91%.
The Valuation is around $75 & therefore undervalued with a share price of $45, showing on the Vector Vest screen.
On the Stockopedia US bubble chart in my watch list This share is currently at the top, which is another good sign.50 day MA is fine. Perhaps another complimentary share ti go with IQE
Stop loss set @ $38.5
Disclaimer
This is not financial advice. Our content is intended to be used and must be used for information and education purposes only. Please read our disclaimer and terms and conditions to understand our obligations.
54 comments
With Trump blocking the Broadcom takeover of Qualcomm I think all the permutations of potential semiconductor M&A are being considered again.
There is a lot of interest in this share today, now over 100M trades already. Temping to top slice & take some profits.
The catalyst seems to have been an upgrade from Nomura, raising their price target from $55 to $100.
They cite increased DRAM pricing expected in Q2, NAND margin expansion, buyback and dividend announcements expected in May, and M&A possibilities.
My first thought on M&A is possibly Intel could bid for them as they already have an established partnership in NAND?
$60 now.
Keep going , 55M trades so far today. Are we going to hit $60? 4.08pm. 50 dayMA 21.8%, 200 day MA 42.8%, 4 screens, Rank 99. Up 9.6%.
A breakout happening at last. Now above the last high of $50. and a double bottom of around $40. The Fib retracement was showing $54, and it has reached it today. The US market also up.
Nanya Tech have just sold 4.5 M shares in MU today and so far the share price is OK, up 3% at time of writing & now above the 50 day MA again.
Micron are up 5% after hours following a strong quarterly earnings report. EPS reported at $2.45, up from $0.32 in the same quarter last year, beating expectations of $2.20.
Revenues are $6.8bn, up from $3.97bn, and beating expectations of $6.39bn.
I too expected a bounce back yesterday with the tax reform bill going through, but it seems a day late in having some effect.and more of a long term benefit in the pipeline. Probably the heavy selling was triggered with automatic stops in place when it hit a 10% drop from almost $50 & it has driven the price even further down. At least there is a kink in the graph again in the right direction again.
Still standing at a 99 Ranking.
Meanwhile, back at the ranch, so to speak TECH also Ranked 99, not Micron Tech, which I took a punt with is making up for MU.in the last week. A big spread, but also a big leap makes it worth while. About 2M shares traded today.
Bearing in mind, what goes up can come down even faster.
More falls today on some tech. shares, MU down 3.5%, LRCX 3.2%, AMAT 4.1%, ANET 8.3%, DLGNF 24.9%, NVDA 5.5%.
I thought there may have been a bounce today with the tax reform bill going through but I read tech. companies will not benefit that much.
John - that's a good point - I think this leads to indiscriminate selling which should create opportunities to pick up the less risky stocks within the ETF at a potential discount to their intrinsic value.
That said, impossible to swim against a tide of negative sector sentiment. My plan is to monitor SOXX for sector sentiment and when this starts bottoming / turning, look to take a position in Micron for 6 months (which hopefully doesn't get stopped out within a week!).
I quite like the minnervini approach of monitoring sectors for when they start moving out of a base and looking to pick 'high flyers' within these sectors. I know he is usually referring to coming out of a recession when some stocks can move up 100% over the period of a few weeks, but I'll see if I can apply his approach more generally !
A possible explanation for the apparently indiscriminate MU drop is that people have been selling out of chip ETFs like SOXX forcing those ETFs to sell all their holdings. There seems to be a rotation out of tech and into US financials based on expectations of the tax measures.
I agree with Herbie, I’m on the sidelines for now.
Yes further falls today on tech. stocks in US. Only one I see going other way is AMBA. I'm out until things settle down.
Yes, Micron just continues to fall (despite the analyst report downgrading NAND pricing not expected to have a large impact on Micron's earnings). https://seekingalpha.com/article/4128981-micron-technology-this-end
It's down almost 20% in a week! Could be good value to pick some up ahead of the Dec earnings announcement but probably worth waiting until it bottoms out first...
Bit scary on the Nasdaq today with a 1.75% drop knocking MU down but not out. Checking the 50 day MA over a month (easiest to see from the smaller chart from the watch list with time frames) not quite hitting the stop @ about $42.5. A fibonacci retracement shows a forward price of $54. Time will tell if it gets there. The value from Vector Vest is $84 so still under valued.Patience.
Great timing by me ! Stopped out already ;) I quite liked the micron chart as didn't look too volatile - that was disproved today!
What's quite noticeable is the strong correlation between all of the 'chip' shares and once the sector takes fright, they're all marked down together. Fundamentals go out the window. May look to re-enter once things stabilise...
Some quite big falls on US tech shares today, many down 5-8%, how's the watchlist looking?.
That said, I've taken a small bit of this on the basis of the strong momentum and believe it will be a little while before that supply comes to market.
Well, good luck with your investment and timing the exit! For commodity products like NAND flash and DRAM you also need to keep an eye on the demand side. If you get oversupply and falling demand at the same time, things can quickly get very ugly. That's all I'm saying, and I only mention this because others who are invested may not understand the industry dynamics well.
All the best, Si
I think you need to be very careful here and properly understand the business that Micron is in. The memory business is incredibly fickle and often subject to oversupply, so it may look superficially cheap. Look at the amount of Capex Samsung are spending this year to blow the competition out of the water:
https://www.electronicsweekly....
IC Insights believes that Samsung’s massive spending outlays this year will have repercussions far into the future. One of the effects likely to occur is a period of overcapacity in the 3D NAND flash market.
This overcapacity situation will not only be due to Samsung’s huge spending for 3D NAND flash, but also to its competitors in this market segment (e.g., SK Hynix, Micron, Toshiba, Intel, etc.) responding to the company’s spending surge. At some point, Samsung’s competitors will need to ramp up their capacity or lose market share.
All the best, Si
I wholeheartedly agree.
It's a cyclical industry characterised by massive under and oversupply. It's how they've gone from breakeven to $5bn profit in a year as they are making hay whilst the sun shines. It's why it's hard to value this business on traditional metrics and say it's clearly 'undervalued'.
As competitors catch up and new supply comes into the market, you'll see large margin compression and quick erosion of profitability at Micron. Where it stabilises is anyone's guess!?
That said, I've taken a small bit of this on the basis of the strong momentum and believe it will be a little while before that supply comes to market. Hoping for a stellar next two quarters trading update and then will re-evaluate.
If there's any change to the forward outlook or signs of margin pressure, it's probably one to exit quickly before the herd. Definitely not a 'buy, hold and forget' stock !
An interesting breakdown John, with FFTY.. 81% US stocks,15.45% China and only 0.45% UK. Top 10 holdings YY from............China! , up over 7% today at the time of writing.
A good equity curve for FFTY.
There is an ETF called FFTY that is based on the Investors Business Daily 50 top ranked US stocks. If you look at the holdings in that ETF there are a number of the shares already mentioned plus the rest of their top 50. The ranking is based on the CAN SLIM system developed by William O’Neill.
I’m on mobile so can’t copy the details but they are here:
http://www.etf.com/FFTY
Alternatively you can subscribe to IBD and/or buy the ETF.
Perhaps we will find if market cap makes any difference. Don't know the largest company in the US ............yet.
You are correct on both counts Herbie, thank's.Simply add NVDA 2 screens position 60.
Price $211.55 . The position can be seen at the top of the Stoco page as position in the universe. Then a quick look to the stock rank which is green, so I can check further rankings when needed.Since I do not have the US version of Stoco at the moment this was the easiest way to help sort out a few good shares. I am sure you can pick another 6, and other people can too, but at least it is a start.
It should be interesting to see the progress as time goes forward anything can happen as you know.
High trading today with AMAT 19M & MU 16M
I see but that is just mcap size, I think just within that region?
If Apple are no 2 who is no. 1?
Well done Herbie for spotting LRCX again. It was mentioned by John Eustace in post 22. I t shows you are on the ball.
Out of all these shares mentioned I have tried to pick out the top 6, bearing there are 6433 US shares to select from & we are talking semiconductors which narrows it down to the market as a whole.
1. MU 5 screens, position 179 Price $36.04
2. ORBK 3 screens position 1607 Price $54.67
3.YY 3 screens position 924 Price $107.93
4. AMAT 1 screen position 147 Price $57.55
5.LRCX 8 screens position 276 Price $210.83
6.KLIC 2 screens position 1889 Price $27.01
The other "spare share" is SGH 3 screens position 2633 , which only got about 5 months on the chart & comparing MU and SGH with a chart comparison, it is perhaps one of the best performer over that time span. Price $36.15
For the record prices at the time of writing 17/11/17
No doubt the watch list will keep an eye on the others and see how things progress.
Yes I missed that one, thought I had seen before, it's post 23 by the way maybe you do need new glasses? No NVDA? What are the positions? I did not think YY was semiconductors? Its also chinese.
Some more to consider: ICHR, UCTT, LRCX, MZOR.
These are all new to me.
With nearly all the shares mentioned here have gone up today and another one to add to the list is SGH up 25.4% today (Smart Global Holdings) which are into memory solutions.
In semiconductor equipment I hold AMAT, LITE and LRCX.
My favourite chip stock is NVDA as they seem uniquely at the centre of a number of hot trends in cloud data, AI, autonomous vehicles and drones, gaming and e-sports and crypto currency mining.
I also have OLED who supply materials and hold patents in OLED screens plus PYPL, PCOM, CRM, ISRG, ALGN
Thanks Herbie & Aislabie for your comments. I have added CRBK & now have got 39 shares in the watch list and the hit rate at close is 31 are up 3 no change and only 5 are down.
This reminds me of Henry Ford getting all the brains around the table in the book "Think & grow Rich", by Napolian Hill.
MU traded around 21M shares today, the second largest volume in the watch list. Any more shares to be added by anybody?
Not sure which ones you have on the watchlist. Yes good day today on US markets.
AMAT results are good but maybe margins are down this quarter.
How about SHOP, LITE, PAYC, PYPL, TRMB, HIMX, CRM?
Short TSLA?
Where are you getting all the info to read about Mark Minervini from ?
Twitter.
Just read Mark Minervini has only one long share at the moment ANAB.
ANAB AnaptysBio Inc? Doesn't look much like a Minervini share to me; it has never made a profit, expected to make a 33m loss this year and a 60m loss next year.
Have you seen the share price? It treble in last 3 months. Think it's more about trials than profit at this stage.
Should have put some glasses on, it is 29.6%. I sold it some time ago now. I thought that was a massive increase. I'll stick to the shares against the funds.
There is now a pretty good selection of semiconductor shares to consider adding to a portfolio. All worth adding to the watch list.
Hi Herbie, I missed out China in front sorry. It is China Special Situations IT.. I had this from launch when it first started. FCSS
Thanks yes I have found it but make it only up 34% this last 12 months? Maybe you mean inception back in April 2010? But even that is only 138% as it starts at 100.
Worth checking out Siltronic AG if you are into your silicon wafers (IQE style).
German share. Strong growth, cheap forward PE and momentum behind it. Just extremely volatile so worth buying and sitting tight or trying to pick up on a dip.
Yes I already have Siltronic AG (WAF), got in too late but still a good profit in last few months, profits are soaring and div. is not bad. Yes can be a bit volatile. I have sold my IQE (LON:IQE) now.
USA one to watch tonight is AMAT, manufacturing equipment, services and software to the global semiconductor industry. Quarter results out, margins may have fallen.
I get exposure to Chinese internet stocks via an etf called KWEB because I don't know the market there well enough to pick winners.
For semiconductor businesses, the SOXX etf is an option.
I was holding BABA for a while and moved on. Sometimes it is better to simply hold and wait like VCP today, but that is not a US share.
Further delving into semiconductors is KLIC that sells tools for semiconductors. They are based in Singapore and declared sales up 48% & Q4 earnings per share $0.51. A pull back yesterday from results released Tuesday could be a good entry point if it starts going up today. Worth watching.
Rank99, Mom 85, Growth 90, Value 91. Another Super stock.
.
Another one on my watch list is YY with on line group activities.Rank 91 Momentum 95, Growth 99, Value 28. Classed as a High Flier with Rev Up 40.6% & income Up 52.3%.This time based in China. Before you dismiss this one,. Fidelity Special Situations trust has clocked up 296% over the year (source from Money Observer OCT 17)
Yes I know BABA is chinese, it's a bit like Amazon, not well known in UK but it's massive in Asia. KLIC is on my watchlist already.
Fidelity Special Situations, which fund is that exactly, I can't see any of Fidelity China funds up that much?
I am also a holder in KLIC and a strong supporting factor in my mind is that the market cap is backed by a large net cash position. Another chip tools company I hold, that also has a strong net cash position and improving fundamentals is Orbotech (ORBK).
If (or more probably when) the growth phase cools I like to see these sorts of companies with a good cash cushion.
Thanks for the info. I have opened a small position in MU. I see David Tepper has increased his holding from 1.25m to over 8m shares which is probably a good sign but I expect the US market to be down today following the ROW markets. Mark Minervini is very bearish at the moment.
Another momentum share is Alibaba BABA.
Just seen an interesting debate on the 700 club tonight regarding tax cuts for the US with economist Steven Moore who is adviser to Trump on the tax cuts. He recons that by 24th December this year this bill will be operational and will save the average American about $3,000 a year and in addition to that another $3,000 in a pay rise! That is based on an average income of $80,000 a year.
Folks that is worth 7.5% extra, so it is worth keeping an eye on the US market if this goes through like he says it will. What sectors will benefit the most.I do not know but only time will tell. Certainly there will be trillions of $'s moving around the economy when this happens.
Also bear in mind that a lot of Americans trade in options, so share prices can jump up rapidly. Exciting times ahead.
For the record that is shown on 13th November 700 club run time about 4 minutes in.
Stop now moved up to $39 for MU.
Hi lighningtiger
Thanks for the info and additional posts.
I have been slowly diversifying into the US market lately (noting its high valuations) and think your spot of £MU is attractive.
As you point out, Stock ranks and general performances look attractive - QR 94 +9; VR 79 +29; MR 99 and SR 99 +7 (note the large positive change to VR), with very positive Growth & Value indicators (except Div Yld); excellent Quality metrics, F-score of 9 (the highest) and generally positive trends on most summary metrics.
I just took up a small position to add into my growing US portfolio.
Many thanks for picking out a US stock, I think we ought to have a few more items looking towards non-UK markets.
Regards
Howard
P/E is currently only 5.95, showing a filled green box on Stockopedia & !QE is showing 42.3, don't know the reason currently for MU being so low.
Demand for these chips are high and the sales growth of 91% speaks volumes, so I'm in it for the ride. This seems to be the best US share in the semiconductor market at this time, but things can change.
Currently my laptop could do with more ram in it to speed it up a bit, but my biggest problem is the intermittent broadband fault that keeps dropping out and you can't get it again for a while. BT are working on it in our area.
Micro chips are here to stay making things faster and storage larger.
I've given a new lease of life to a few family laptops by replacing the old mechanical hard drive with a solid state drive from Crucial (a Micron brand). One for the enthusiast, not as simple as adding RAM as you have to clone the old drive, but effective.
I'm a Micron holder. IBD at investors.com likes it as well with a 97 composite rating.
It's a great stock when times are good... All IOT tech needs memory so its a common sense play. Its P/E is so low as historically it has had a horrible tendency for the price action to whipsaw, plus there were also management issues in the past - over production etc...& the ever looming copy cat Chinese story... But MU's innovation & improving demand for its product range make it a stand out BUY for me currently.
Why is the P/E so low, on most tech stocks the PE ratio is sky high at the moment. I don't have access to Stockopedia US market.