Analysts mull over Micron Technology, Inc (NASDAQ:MU) performance
Micron Technology, Inc (NASDAQ:MU) is one of the leaders in the memory-chip space. Of late, it had had quite a noteworthy performance on the stock market and has consistently been categorized as a “buy” and an actively traded stock. However, there is a segment of investors who feel that now is a good time to sell off the shares and make profits while they can. When the company is doing so well for itself, why exactly does this question come into play?
Over the last one year, MU’s share-price has risen by more than 100%. It stood at $6.18 on 31 August 2012 and on 27 August w013, it was $13.18. It had reached a year-high of $14.97 in 2013 August. No doubt shareholders have been more than just happy with the performance of the stock but investors are still skeptical. Analysts might opine that technology stocks and particularly those that that deal with memory products have a tendency to move through a cyclical performance. Thus, like many of its peers, Micron too might be moving through a similar cycle. Now that it has reached its peak levels it might just come crashing down.
The one point that is uncertain though is whether the stock has actually reached its peak levels at all. Some feel that there might be a bit of a climb still left. The company’s stock is valued at 7.32 times of future earnings. This means that there is a distinct possibility that the stock has not yet reached its peaks.
MU reported a quarter-on quarter increase of $142M in revenue in the Q3 of 2013. It has also reported a rise from a –ve EPS of $0.32 to $0.04. This definitely shows improvement and adds to the confidence of investors. In addition, the company has also recently acquired Elpida. This is expected to add to its cash position.
Both, the company as well as its investors strongly believe that MU will soon be in a position to distribute a dividend. This is one of the factors that have led to a higher valuation of the MU stock and it seems like a good one to hold on to.