• 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5

Micron (MU) insight ?

Does anybody have any insights into the future of Micron Semi (MU).  It has had a very good run up in the past year, but seems to be unable to recapture its highs.  The stock screener shows very favorable long term sentiment and unfavorable short and mid term sentiment.
I can only add a couple more things to the discussion at the time: 1) The potential impact of the espionage case by a Chinese company to steal MU's IP (perpetrated by Taiwanese employees of MU). To add insult to injury, MU sued the Chinese company, the Chinese company counter-sued and won in a Chinese court, with the consequence that it prohibited MU to sell some products in China. 2) Whether MU will be affected by tariffs in an escalation of the current tariff war.

Those 2 events added even more volatility to an already highly volatile situation. Definitely owning MU is not for the faint of heart. I am still very bullish on MU simply because of the huge demand in DRAM and NAND memories needed for data centers/IOT devices, AI, ML, etc etc.and only 3 companies in the world to provide (MU being the only US company.)
Friend of mine knew a employee of micron and always said they were a great company that generated a lot of cash. He bought and sold on the margin and made a ton of money on micron. buy a boat and drink cold beer. stay the course
This stock is trading as though this company is going bankrupt?
Lower margin is that so bad that this stock is trading below 4 times TTM P/E?
Is the market saying that no more profits in the near future due to lower margins and high competition due to demand and supply of memory chips?
FWIW, I am still very long on MU. It appears it touched bottom yesterday as today it recovered some ground. We will know the truth behind the single reason for the successive downgrades on the 20th (ER).
Regarding $MU specifically. Their business is much more than $APPL demand. The fact that they reduce their orders to the $LRCX or $AMAT of this world, I see it as a positive. $MU together with other 2 non-US companies control the world market in DRAM, if they overproduce the price of DRAM goes down. Not to mention that $MU's biggest source of income is NAND. Much more demand comes from data centers, AI, mobile, cars, etc.  That is at the heart of the current debate: Is $MU suffering the cyclicality of years past or not due to the many demand sources? I am betting heavily on the second. Two more points: 1) 3DXPoint, the future of memory, only MU and INTC have the IP, 2) $MU as mentioned above, is selling at PE of 4 as if the sky was falling. 
Looking at the price action, it seems like their business itself is under threat.

Whats stops a company taking itself private if the market is mis-pricing by a factor of 70% (compared to S&P P/E , MU maybe selling at around 70% discount).

I think the market is saying, MU revenue will fall significantly and their profits will be go to zero in near future until the uncertainty in their sector is removed.

And nobody will lend them money to do buyback or take the company private since their actual future P/E may not be actually 4.

We will see if market is wrong.

Forum Jump:

Users browsing this thread: 1 Guest(s)