I am buying Micron Technology at $10 - $10.2.
I think Micron Technology is going to go up in the short term. Recently, Credit Suisse has increased its price target to $20. The stock plunged from $11 to $10.18 on Friday. The chart pattern looks very bearish short term. However, the fundamentals are very bullish. Micron Technology just announced a high EPS of $0.39 for its 2nd fiscal quarter. This puts MU on track to make more than $1 EPS for 2010 fiscal year. With this in mind, MU is trading at less than 9X current EPS and less than 7X forward EPS.
Micron Technology is in the memory DRAM and SSD business. With the increasing demand of flash memory from APPLE, Netbooks and the future Windows Slate and mobile phones, MU is able to sell its NAND at a higher profit margin.
Morgan Stanley has also upgraded the NAND sector to overweight. UBS and JPMorgan are still contemplating whether to turn positive. They have been bearish with this sector.
Since APPLE and SanDisk (micron’s competitor) have enjoyed a price surge, I think MU is still undervalued. The company’s books looks very good. My target is $15 by June.
BUY MU at $10.
Sell at $12.75 and $14.50
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