Why I'm Buying Micron: Part I

I’ve been watching Micron (MU) for a few months now, and I think the semi’s could really run tomorrow on a favorable Philly Fed Index. It won’t be fundamentally based so much as inventory building, but Micron’s price represents a solid entry point on its own merits. It has some balance sheet strength, and there’s not a lot of competition out there for solid semiconductor firms outside of INTC, TXN, and NVDA, which already sits comfortably in the Secular Trends Portfolio.

Adding 5000 shares MU at $5.31; thesis posting to follow shortly.

Comments

[flashguy99999:]

this a preposterous post. There's so much wrong about everything you say that it's disgusting. this hurts seekingalpha

Jun 18 08:09 AM

[Flimtonius:]

Where do I start? NVIDIA competing with Micron? They are one of Micron's customers. They are in different market segments. Texas Instruments? Once again, different market segments. Micron bought out TXN's memory business years ago. Intel does compete to a certain extent with Micron, but they share a joint Flash venture. INTC could crush Micron if they were foolish enough to want to be in a commodity business such as DRAM. (They are probably seriously rethinking their entry into NAND FLASH right now, since that is commoditized.)

The real competitors for Micron are overseas. Samsung, which alone owns over 30% of the market share, along with Hynix and Elpida, present huge competition for Micron. Samsung has stated in press releases in the past that they rely on their consumer electronics to fund their DRAM and NAND FLASH business segments when they aren't very profitable so that they can emerge as the big player after all the other companies go under. How is it that you can say that Micron has virtually no competition?
People really need to understand the industry before putting money into a stock, or they are better off playing at a Roulette wheel in Vegas.

Jun 18 04:06 PM

[beandog:]

Forget Micron. It's gonna go bankrupt if it loses the antitrust civil cases for price fixing that hurt Rambus, the next Qualcomm: beanieville.blogspot.c...

Jun 20 04:41 AM

[Ryan Barnes:]

To flashguy - you have 8 comments, and 7 of them are completely antagonistic. I have no problem with that per se, as I imagine you get some perverse sense of pleasure out of berating. Tell people what you like, or elaborate what you don't, but I have to wonder who is doing the most harm at SA - those who post ideas for discussion, or those who clog up the gears with baseless chatter. Good luck in your investing efforts.

to Flinstoneous - I wasn't saying that TXN, INTC, and NVDA are competitors of MU. My comment on this short post was that there aren't a lot of semi stocks that have any fundamental or balance sheet strength. These three are the best. I wasn't talking about industry competition in terms of product offerings; sorry if there was any confusion. If you're interested you can read my post tomorrow on my investing thesis. If not, I frankly don't care. Good luck in your investing efforts; your comments on Samsung and overseas competition are quite astute. My bet on MU is based on a bottoming of DRAM and NAND pricing, and the positive catalyst of the exit from CMOS (well, mostly an exit). It's a positive step

To Beandog: Didn't know you traveled outside of the RMBS boards. Your alliances are extremely well-documented. I know many people who have been holding that stock for the better part of a decade. My experience with extended patent disputes is that the payout rarely comes, and never in the dollar terms hoped for. Nevertheless best of luck.

Jun 24 03:36 PM