Micron crushes it in Q1 & guides up

Investment Analysis Clubs Saul’s Investing Discussions
1

https://seekingalpha.com/news/3319242-micron-technology-beat…
https://seekingalpha.com/news/3319261-micron-plus-3_1-percen…
https://seekingalpha.com/pr/17030941-micron-technology-inc-r…

Micron Technology (NASDAQ:MU): Q1 EPS of $2.45 beats by $0.25.

Revenue of $6.8B (+71.3% Y/Y) beats by $410M.

4 Likes
2

As mentioned previously - this could double from here and still exit 2018 with a P/E lower than 10. Guidance for next Q on tougher compares is still 50% growth. Sequential growth still in double digits on top of all time high results. Everyone is asleep at the wheel on this one.

Ant

2 Likes
3

Everyone is asleep at the wheel on this one.

Not quite everyone…:slight_smile:

1 Like
4

Everyone is asleep at the wheel on this one. Ant

I agree wholeheartedly. Micron has traditionally been valued on the basis of having its memory chips in phones and PCs. Micron has hurdled past just those markets. I suggest folks study the earnings call slides:

https://seekingalpha.com/article/4132834-micron-technology-i…

Micron is supplying SSDs to data centers at amazing growth rates. The growth numbers (pace and revenues) are quite positive. I just scratched the surface. The investment thesis here is incredibly strong.

5 Likes
5

Ant,

What is keeping the valuation so depressed?
Is their current uptick in business sustainable?

Just a few questions from someone who doesn’t know much about the company.

Thanks,
AJ

1 Like
6

What is keeping the valuation so depressed?
Is their current uptick in business sustainable?

I think you answered your own question. Perceptions are everything in markets, at least over the shorter term,and it is usually easier to make money in stocks based on a rising P/E than on rising E.

With anything close to a commodity high demand creates supply, usually excess supply. Not a matter off “whether” but of “when”

But congrats to those who picked this up early on.

7

this could double from here and still exit 2018 with a P/E lower than 10.
maybe it’s not too late to buy if it doesn’t run up too much tomorrow AM. because we know company will be around for awhile
With a company not followed closely in the press it usually takes days for the good news to filter through investment committees and even more time to move out to retail buyers. Bad news always moves faster…

Meanwhile I am stuck with little investable cash in my account. Adequate cash, just can not use it. Recent trades means I am stuck with the absurd 2 day “settlement date” problem. In today’s computer world why should it take more than split second to settle? Probably just another “gimme” for brokers and investment bankers. As if they did not have enough perks already.

1 Like
8

Meanwhile I am stuck with little investable cash in my account. Adequate cash, just can not use it. Recent trades means I am stuck with the absurd 2 day “settlement date” problem. In today’s computer world why should it take more than split second to settle? Probably just another “gimme” for brokers and investment bankers. As if they did not have enough perks already.

You solve that by having a margin account instead of a cash account. You don’t have to use the margin so it costs you nothing.

Denny Schlesinger

1 Like
9

Even in my rollover account where I have no margin, Fidelity lets me use unsettled funds to buy new stocks, but gives me a warning about a good faith violation if I were to prematurely sell those new stocks before the funds settled.

1 Like
10

Even in my rollover account where I have no margin, Fidelity lets me use unsettled funds to buy new stocks, but gives me a warning about a good faith violation if I were to prematurely sell those new stocks before the funds settled.

Schwab does, too.

1 Like
11

Hi AJ

It is being held back by:

  1. Perception it is a commodity business and Micron are not lowest cost producers
  2. Perception it is a cyclical industry that peaks and troughs in terms of supply/demand balance and pricing
  3. Micron is conservative with guidance and not liked after secondary offerings etc

My response is:

  1. It was but Micron has taken a leadership in 3D point and has proprietary product now
  2. The cycle has become a secular trend with big data centers and the cloud and mobile and IOT edge computing etc
  3. Micron will be debt free with a P/E of 5 in less than a year

Hi Mauser

I bought in some more after the last earnings release at 36. Every release de-risks the future and adds more value and confidence to the position. It probably isn’t too late. It has a P/E of 7!

Ant

9 Likes
12

thanks Denny
my main account is an IRA and I don’t think you can use margin, but will check on it.

13

No, you can’t use margin in an IRA, but see if the broker will let you use unsettled funds. I have an account with Vanguard, and they allow it.

14

I bought in some more after the last earnings release at 36. Every release de-risks the future and adds more value and confidence to the position. It probably isn’t too late. It has a P/E of 7!
Ant

I opened a small position today, thanks.
John

1 Like
15

Everyone is asleep at the wheel on this one.

Not quite everyone…:slight_smile:

Not quite is right.

I loaded up some more on 12/6. I consider this a cyclical play, which some don’t like no matter what. But
I don’t think the tea leaves are too well hidden in this one. I consider some of these Cycle Monsters as
temporary but valuable anchors for fast-growth investing. It’s almost out of fashion to invest in “old-
tech” things like credit card companies, chip makers, etc., but if you can catch them on a strong up-
cycle, it’s an enjoyable ride and compared to many of my other holdings, fairly safe.

I don’t have Saul’s guts. (Nor his money) :slight_smile:

When the commercial comes on that asks, “What’s in your wallet?” I like to pull out the lint from the
bottom of my otherwise empty pocket and say, “Not much.”

Dan

2 Likes
16

https://www.marketwatch.com/story/micron-universal-display-s…

Shares of numerous Apple Inc. suppliers are falling Today following reports of weak demand for the iPhone X