- Micron has had an explosive rally since mid May. Many are expecting a pull back which may never materialize.
- Micron's NAND divisions is where future growth will come from. Next generation 3D products and solid state drives will drive earnings.
- I would not hold this stock beyond $20 a share. Micron is a favorable position at present that may not last going forward.
This is not to say that Micron is not without opportunity. It certainly is but let's go through its long-term fundamental metrics (10 year) which illustrate the volatility and cyclical nature of this sector. Furthermore, since Micron's fiscal year starts in September, I'm going to include trailing twelve-month averages in our exercise.
|Net Income||$1,071 billion - Pass|
|Free Cash Flow||- $460 million (10-Year Trend Is Down) - Fail|
|Revenues||$13.73 billion (10-Year Trend Is Up) - Pass|
|Operating Margins||9.4% - (10-Year Trend Is Down) - Fail|
|Price History of the stock||Down 21% in the last 10 years - Fail|
|Healthy balance sheet||Total assets = $24.14 billion (10-Year Trend Is Up) - Pass|
|Competitive Advantage|| |