Micron Tech (MU) Semiconductors Superstock Rank 99 $51.6 Mkt Cap

Monday, Nov 13 2017 by

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

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Micron Technology, Inc. is engaged in semiconductor systems. The Company's portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets. more »

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54 Posts on this Thread show/hide all

simoan 21st Nov '17 35 of 54

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:


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

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nicobos 21st Nov '17 36 of 54

In reply to post #243308

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 !

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simoan 21st Nov '17 37 of 54

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

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herbie47 29th Nov '17 38 of 54

Some quite big falls on US tech shares today, many down 5-8%, how's the watchlist looking?.

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nicobos 29th Nov '17 39 of 54

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...

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lightningtiger 30th Nov '17 40 of 54

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.

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nicobos 1st Dec '17 41 of 54

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...

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herbie47 1st Dec '17 42 of 54

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.

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JohnEustace 1st Dec '17 43 of 54

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.

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nicobos 2nd Dec '17 44 of 54

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 !

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herbie47 4th Dec '17 45 of 54

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.

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lightningtiger 5th Dec '17 46 of 54

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.

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JohnEustace 19th Dec '17 47 of 54

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.

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lightningtiger 20th Dec '17 48 of 54

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.

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lightningtiger 6th Mar 49 of 54

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.

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lightningtiger 12th Mar 50 of 54

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%.

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herbie47 12th Mar 51 of 54

$60 now.

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JohnEustace 12th Mar 52 of 54

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?

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lightningtiger 12th Mar 53 of 54

There is a lot of interest in this share today, now over 100M trades already. Temping to top slice & take some profits.

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JohnEustace 13th Mar 54 of 54

With Trump blocking the Broadcom takeover of Qualcomm I think all the permutations of potential semiconductor M&A are being considered again.

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