Action: Buy Micron Technologies (MU-US)
Current Price: $9.15 US
Investment Risk Profile: Medium to High
Anticipated Duration: Short term (3 to 6 months)
Micron is one of the world’s leading semiconductor companies. Their DRAM, NAND, and NOR Flash memory chips are used in everything from computing, networking and server applications, to mobile, embedded, consumer, automotive and industrial designs. Over the past thirty years they have continually redefined innovation with their advanced semiconductor solutions. The company employs 15000 people worldwide and boasted net sales of $4.8 billion in 2009.
MU hit a 52 week high of $11.40 on April 14th and has corrected 20% since. We believe this is an excellent entry point for investors looking to capitalize on recent weakness in the broader markets through one of the premier technology names.
Investment Highlights:
– DRAM sales in the most recent quarter were up 24%
– Looking forward, management points to strong PC and server demand as the key driver to sales growth.
– They ended the quarter with $1.9 billion in cash, a 19% increase over the $1.6 billion in the November quarter.
– They recently acquired flash memory maker Numonyx in a deal valued at $1.27 billion US, bringing together two memory chip leaders and positions Micron to offer the most comprehensive, cost-competitive solutions in the industry to a broad range of customers and end markets.
– The book value of the company currently stands at $5.57, providing investors with an opportunity to own a leading semi company at a compelling price of 1.63 times book.
Investment risks include overall weakness in the equity markets, unforeseen slowdown in semiconductor demand, corporate integration risk and currency risk.
Please contact us by phone to discuss this recommendation and how it fits with your overall investment strategy.
Marc & Jamie
JAMIE SWITZER | Raymond James Ltd.
Senior Vice President, Financial Advisor
North Vancouver IAS
PH: 604.981.3355 | FAX: 604.981.3376
jamie.switzer@raymondjames.ca
MARC LATTA | Raymond James Ltd.
Senior Vice President, Financial Advisor
PH:604-981-3366 | FAX: 604.981.3376
marc.latta@raymondjames.ca
Suite 480, 171 West Esplanade
North Vancouver, British Columbia
This newsletter expresses the opinions of the writers, Marc Latta and Jamie Switzer, and not necessarily those of Raymond James Ltd. (RJL) Statistics and factual data and other information are from sources believed to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is not meant to provide legal, taxation, or account advice; as each situation is different, please seek advice based on your specific circumstance. RJL and its officers, directors, employees and their families may from time to time invest in the securities discussed in this newsletter. It is intended for distribution only in those jurisdictions where RJL is registered as a dealer in securities. Any distribution or dissemination of this newsletter in any other jurisdiction is strictly prohibited. This newsletter is not intended for nor should it be distributed to any person residing in the USA. Within the last 12 months, Raymond James Ltd. has undertaken an underwriting liability or has provided advice for a fee with respect to the securities of the Royal Bank of Canada. Raymond James Ltd is a member of the Canadian Investor Protection Fund.