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.
– 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
Suite 480, 171 West Esplanade
North Vancouver, British Columbia
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