Micron Technology Brings Out the Bulls and Bears

Jacob Harper |

In early action on Monday, the blue chip semiconductor manufacturer Micron Technologies (MU) continued to do their best impression of a growth stock, notching a 7.37 percent gain by midday trading. The company has already turned heads, ratcheting a 239.34 percent gain in 2013, and, despite a hiccup in March, is surging right back up the charts.

To be sure, Micron has benefited from the persistent investor fascination with high-tech, specifically companies in the burgeoning memory chip manufacturing business. As the Big Data obsession continues apace, the demand for information storage continues to fuel the sector as a monolith.

But even within memory chip manufacturing, Micron has proven to be something special.



A Growth Play in Blue Chip Clothing

Within the subsector, Micron has been able to seemingly split the difference between smaller growth memory chip makers like Spansion (CODE) and Integrated Silicon Solutions (ISSI) and more-stable yet less-exciting large-cap contemporaries like Intel (INTC) . Micron has, so far, gotten the best of both worlds, notching a three-bagger since mid-2011 while carrying a multi-billion dollar market cap.

Micron’s stratospheric rise is not solely attributable to general investor over exuberance concerning the tech sector, however. The Boise, Idaho-headquartered manufacturer has consistently beat analyst expectations while maintain an ultra low profit-to-earnings and forward P/E ratio, even after its 2013 renaissance.

Or:  Micron’s Growth Will Soon Be Just a Memory

Befitting a company with such unusual market performance, Micron is not without its naysayers. The company currently carries a short float of 11.82 percent. Additionally, in October of last year Goldman Sachs (GS) raised concerns over Micron, iterating in a research report that the chipmaker has a downside of 19.9 percent.

Micron has performed well in 2013, turning around losses to post a series of exceptional earnings reports. But as moribund, cash-rich companies like Apple Inc (AAPL) prove time and time again, when it comes to blue chips in the tech sector the money is secondary to the ideas.

What, if anything, Micron has in store for 2014 will most likely come to light during their upcoming second fiscal quarter 2014 earnings report. The company will issue that along with any forward-looking financial statements after the bell on Thursday, April 3.

Micron is expected to report a profit of 61 cents a share on revenue of $3.98 billion, compared with a loss of 28 cents a share on revenue of $2.08 billion the year prior.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
INTC Intel Corporation 44.56 1.30 3.01 47,476,952 Trade
GS The Goldman Sachs Group Inc. 257.17 1.69 0.66 5,283,374 Trade
ISSI Integrated Silicon Solution Inc. n/a n/a n/a 0 Trade
MU Micron Technology Inc. 42.40 0.16 0.38 58,721,655 Trade
MGPHF Mason Graphite Inc 1.92 -0.06 -3.24 42,133

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