Player Avatar JakilaTheHun (99.94) Submitted: 11/25/2008 12:56:01 PM : Outperform Start Price: $2.17 MU Score: +208.72

Things have been ugly for Micron (and memory makers in general) lately, but I'm going to take a gamble and give the thumbs up on MU. Book value is $8.11 per share, so this is selling at a near 75% discount to that. Micron's balance sheet is not spectacular, but they are in reasonably good shape. While it's fair to say the stock should sell at a discount given their heavy losses in recent times, I think a 25-40% discount on book value is more reasonable.

The memory sector will probably continue to incur heavy losses for the next year or two, but with Qimonda going down (either in a Micron-buyout or via bankruptcy) and consolidation occuring within the industry, the remaining memory makers will gain a little bit more pricing power. Given that the major problem in the industry was over-supply and too much competition, this could mean a return to profitability some time within the next 2-5 years. The market is also overreacting to the big lawsuit against MU, as even if they have to pay out substantially, I think they can afford it. Overall, I think this is a beaten-down stock with strong potential to rebound in a dramatic fashion sometime within the next 5 years; but this is a long-term buy-and-hold only and this is definitely not for the risk averse!

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Member Avatar JakilaTheHun (99.94) Submitted: 2/2/2009 10:23:24 AM
Recs: 0

I'm amazed by how well this pick is doing. Things are still bleak in the DRAM industry but with Qimonda's (QI) bankruptcy, some excess supply should filter out. Micron is not in "excellent" shape, but if they can survive, I think this stock is eventually worth at least $8-10. It'll be interesting to see their financial results at the end of 2009 and early 2010 once the impact of QI's departure begins to be reflected in their own results.

Member Avatar JakilaTheHun (99.94) Submitted: 8/25/2009 2:54:43 PM
Recs: 0

I've debated it long and hard and I've decided that it's time to end my Micron pick. I actually sold out of this at around $6.50 for my simulated portfolio at KaChing. However, since TMF's score is heavily dependent on initial entry price, I decided to hold on a bit longer here. However, at $7.15, I just feel like risk has gotten to be too high to justify the rewards.

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