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Zach Te Winkel

Zach Te Winkel
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  • Wait And See: Thoughts On The Micron Q3 Earnings Call [View article]
    Management is incompetent. I get what your saying but how in the hell do you say many many times that the back half is going to be stronger and then give reduced guidance and say other area like margins in Mobile are tough as well, which they had never said. Has they hinted at weakness I would understand but they were pounding the table on the strength but then cut rev. And margin guidance by 10%+. all the while the insiders have been selling since the peak in Dec. There has to be some accountability....
    Jun 26, 2015. 11:23 AM | 21 Likes Like |Link to Comment
  • Wait And See: Thoughts On The Micron Q3 Earnings Call [View article]
    I feel a class action lawsuit is in order after their continued positive comments even after the quarter ended and then they have terrible guidance.
    Jun 26, 2015. 11:04 AM | 14 Likes Like |Link to Comment
  • Micron -6.8% after FQ3 miss, soft FQ4 outlook (updated) [View news story]
    I feel there mislead investors based on recent conf. Call and events where they totally over sold the strength of the business
    Jun 25, 2015. 05:39 PM | 14 Likes Like |Link to Comment
  • Who Buys Micron? [View article]
    Russ are you staying long going into earnings? This sell off seems way overdone based on the long term (12-24 month) trend for Memory.
    Jun 25, 2015. 02:34 PM | 1 Like Like |Link to Comment
  • 3 Major Issues For Micron Into Earnings [View article]
    Bank Of America / Merrill Lynch maintains Buy rating and $40 PT (technically down from $40.50). Here is the note on previewed earnings:
    Long-term earnings solid despite muted 2H FY15; PO $40We retain our bullish stance on Micron. True, the stock has not performed well YTD (down 30%) coupled with PC (spot price weakness) and Inotera (lower amount of outsourced DRAM due to slower 20nm ramp-up). That said, our research still points to $4 EPS in FY16-17E vs $2.5/2.9 in FY14-15E. Our PO (lowered slightly to $40.0) is based on up-cycle fair value, but still implies FY16E P/E of 10x.3Q FY15 preview and 4Q momentum checkWe acknowledge 3Q results (due 25 Jun) might be weaker than guided (due to lower DRAM bit/ASP), but that is not a negative surprise. We still believe 3Q sales (our estimate $4.0bn), gross margins (32%) and EPS ($0.58) can meet/beat consensus ($3.9bn, 31%, $0.54) due to non-PC DRAM (stable ASP), NAND (spot upbeat) and yen weakness (Elpida fab efficiency). 4Q will clearly be better off vs 3Q given Apple’s new order and the China theme (lots of new 4G LTE phones). NAND is also expected to recover further, posting over 10% operating profit margin (OPM; vs low- single-digit in 3Q). We assume 4Q sales of $4.4bn, gross margin of 36% and EPS $0.72. We do not see any more profit contraction (QoQ)PO and FY16-17E EPS almost unchanged, despite weaker 4QOur revisions to our FY16-17E EPS and PO are marginal – 1% cuts on average due to slightly lower DRAM assumptions. That said, 4Q FY15 operating profit/EPS cuts are about 20% due to lower DRAM assumptions (OPM 28% vs 33% previously, given lagged impact from weak PC DRAM prices and Inotera’s miss on 20nm ramp-up). But this shouldn’t be a concern as 4Q could still achieve nearly up-cycle level of earnings and 1Q FY16 might deliver a full-fledged recovery due to Apple/China themes.Competitive landscape and Apple theme still favorableAsia data points (Samsung’s 20nm ramp-up, channel inventory, spot pricing) and Apple’s new chip order look collectively better for 2H CY15 vs 1H.
    Jun 25, 2015. 01:16 AM | 16 Likes Like |Link to Comment
  • Micron -2.2% on Goldman downgrade; Cowen starts at Outperform [View news story]
    I get there notes they have next year at $4.10 with $5 for following year.
    Jun 23, 2015. 02:19 PM | 2 Likes Like |Link to Comment
  • Micron's 'Qualcomm Problem' [View article]
    The street would love .67.. We would rally 5%. I think expectation / fear is .55 or less with less than .50 for August quarter.
    Jun 22, 2015. 07:06 AM | 2 Likes Like |Link to Comment
  • Topeka upgrades Micron following investor meeting, checks [View news story]
    Credit Suiess Maintains $50 PT but cuts earnings forecast. Here is the note:
    F3Q Preview: Better Than Feared■ Bottom Line: MU reports F3Q on 6/25 after the close with a cc at 4:30 PM EST. We expect F3Q/F4Q EPS of $0.57/$0.57, BELOW CS/Street but better than feared especially for F4Q (expectation <= $0.50). A bottom in EPS in May/Aug, an expected positive inflection in PC builds in July with Win10 RTM, and neg sentiment (6 downgrades of late) is providing a great entry point. While 1H15 was worse than we had anticipated – we would note: (1) 1H15 weakness was demand not supply or irrational behavior, (2) Inventory ex Kingston (only 2% of the market), DRAM inventory is a normal 4-5 weeks and declining, (3) Samsung seems to be holding contract PC module pricing at $22-23 for 4GB module, (4) The GAP between PC production and sell- thru is as wide as we have seen since 2000, (5) PCs have declined from 80% of DRAM in 2007 to 23% today, ~15% in 2 years, (6) ASPs for Mobile/Server DRAM has been extremely stable at -7%/-9% YTD, (7) A slowing Moore’s Law is driving sustainable supply growth of ~20% or less down from 30-40%, (8) A growing importance of DRAM to cloud/Big Data (15% of DRAM today, 30-50% over the next 3 years) and (9) Increasing optionality value around NAND and the Intel JV. Three things concern us: (1) DRAM bit growth for MU in CY15 will be <10%, (2) FY16 MU Capex could be $4.8bn, up from $3.8bn in FY15, and (3) Slowing handset unit growth negatively impacting demand albeit more likely in CY17 than CY16 – DRAM/handset in CY15 is 1.2GB up from 750MB in CY14, with a glide path to 2GB over time. We are currently estimating CY15/16 EPS of $3.00/$4.10 and expect $0.34/$0.63 cents of potential downside thru earnings respectively – implying a stock that is currently trading at 9x/7x times CY15/CY16 EPS with an implied CY16 FCF yield of 11%.F4Q (AugQ) Below CS/Street: We expect MU to at Miss CS/Street estimates for AugQ and imply rev/EPS of $4.10bn (+5.1% q/q)/$0.57, better than buyside expectation of <$0.50 EPS, but below CS at $4.30bn (+9.4% q/q)/$0.70 and Cons estimates of $4.23bn (+7.4% q/q)/$0.68. Lower EPS relative to CS is primarily driven weaker DRAM profits and Inotera lower equity income, partially offset by higher NAND profits. We expect MU to guide AugQ revenues at $4.00bn to $4.20bn (+3% to +8% q/q), ASP to down 10%, bit shipment to mid teens and Cost to mid single digit. We estimate DRAM bit shipments at +15% q/q due to benefit of 20nm transition and increased level of shipments for Mobile (DDR4 for AAPL) - recall that MU had indicated at last earnings call that the company is migrating PC capacity to Mobile - we expect that this will be available in AugQ and provide healthy bit growth. We expect lower PC DRAM pricing and higher mix of wafer sales (to support AAPL) to lead to ASP of -10% q/q versus CS at -3% q/q (we estimate like for like pricing at -5% q/q). We expect DRAM cost decline of -6.5% q/q versus CS at -3% q/q as higher ASP declines in MayQ lead to higher cost declines for Inotera bits. We expect MU to indicate pricing for NAND at flat q/q vs. CS at -3% q/q. We estimate GM of 30.3% (down 130bps q/q) and OpEx of $575mn in AugQ (vs. $575mn in MayQ). We expect Inotera equity contribution of $70mn versus CS model at $100mn, leading to a $0.03 impact relative to our model. We expect lower DRAM profits and lower equity income, offset by higher NAND margins to drive EPS to $0.57, below our model at $0.70. We are modeling CFO/FCF of $1.84bn/$950mn (vs. $1.25bn/$149mn).Valuat... We continue to see extremely favorable supply/demand trends in memory for 2015/2016 with rising capital intensity and incremental demand drivers especially as it pertains to data analytics. Sub-seasonal PC growth in Q1 and PC DRAM pricing is concerning, we would note that PC DRAM still has the highest margins and Mobile/Server pricing is still holding up. MU screens among the highest revenue/EPS growth Semi company but trading at cheapest on P/E, FCF and EV/EBITDA basis. We believe the question here is not whether estimates have upside or not but rather, whether margins can be sustained. We expect that as MU starts to return cash in form of buybacks and dividends, multiples will expand. We continue to maintain our view of $5+ of sustainable EPS and our $50 PT.
    Jun 22, 2015. 04:27 AM | 9 Likes Like |Link to Comment
  • Topeka upgrades Micron following investor meeting, checks [View news story]
    Well said treedoc... Where has been the downgrade after meeting with the micron team. I still say spot price vs. contract price is at a disconnect and that is driving much of the misconception on the stock.
    Jun 19, 2015. 10:13 AM | 7 Likes Like |Link to Comment
  • Topeka upgrades Micron following investor meeting, checks [View news story]
    Baird also Reiterated a BUY and $36 PT:

    Reiterating Outperform rating on tightening DRAM outlook for C2H, improved cost structure into C2016. Lowering our estimates to reflect continued PC DRAM weakness and weakening server DRAM pricing in C2Q. We continue to believe DRAM pricing will tighten in C2H, driven by mainstream smartphones migrating to 2GB mobile DRAM content along with an expected rebound in PCs and China smartphones. PC DRAM inventories are normalizing, and Micron is well positioned to improve its mix and cost structure into C2016.
    Lowering our F2016 estimates to reflect continued PC DRAM weakness in C2Q, along with weakening server DRAM pricing trends in the quarter.
    We continue to believe DRAM pricing will tighten in C2H, driven by the mainstream of the smartphone market moving to 2GB from 1GB mobile DRAM content, along with an expected rebound in PC units and in the China smartphone supply chain.
    Near term, PC DRAM weakness continues, given below-expectation trends in both PCs and servers in 2Q, and despite limited DRAM supply bit growth.
    We believe DRAM inventories at PC OEMs have now normalized around 5 weeks, down from 6-7 weeks in 1Q.
    We estimate Micron's 20nm yields are now above 60%, improving and soon ready for sampling.
    In NAND flash, pricing trends are expected to stabilize in the second half except in client SSDs, where the mid- to high-single-digit quarterly pricing decline witnessed to date is expected to continue throughout the year, driven by Samsung.
    Supply chain expects Micron to launch 16nm TLC in 3Q, with a majority of the output going to mobile. Samsung is currently readying 16nm TLC for volume, while Sandisk's mainstream 15nm TLC may not be ready until late 4Q.
    Supply chain expects Samsung's 48-layer 3D NAND to be ready by end of this calendar year. Micron/Intel is expected to launch 3D NAND in 4Q15 as well, while Toshiba should be in production in 1H16.
    Micron-specific catalysts include an improving cost structure in both DRAM and NAND for C2016, driven by node migration as well as new NAND architectures (TLC then 3D).
    Reiterating our $36 price target and Outperform rating on MU shares. Valuation remains attractive.
    Jun 19, 2015. 09:01 AM | 10 Likes Like |Link to Comment
  • Micron's 'Qualcomm Problem' [View article]
    Baird reiterated $36 PT after market close. Reiterating Outperform rating on tightening DRAM outlook for C2H, improved cost structure into C2016. Lowering our estimates to reflect continued PC DRAM weakness and weakening server DRAM pricing in C2Q. We continue to believe DRAM pricing will tighten in C2H, driven by mainstream smartphones migrating to 2GB mobile DRAM content along with an expected rebound in PCs and China smartphones. PC DRAM inventories are normalizing, and Micron is well positioned to improve its mix and cost structure into C2016.
    Lowering our F2016 estimates to reflect continued PC DRAM weakness in C2Q, along with weakening server DRAM pricing trends in the quarter.
    We continue to believe DRAM pricing will tighten in C2H, driven by the mainstream of the smartphone market moving to 2GB from 1GB mobile DRAM content, along with an expected rebound in PC units and in the China smartphone supply chain.
    Near term, PC DRAM weakness continues, given below-expectation trends in both PCs and servers in 2Q, and despite limited DRAM supply bit growth.
    We believe DRAM inventories at PC OEMs have now normalized around 5 weeks, down from 6-7 weeks in 1Q.
    We estimate Micron's 20nm yields are now above 60%, improving and soon ready for sampling.
    In NAND flash, pricing trends are expected to stabilize in the second half except in client SSDs, where the mid- to high-single-digit quarterly pricing decline witnessed to date is expected to continue throughout the year, driven by Samsung.
    Supply chain expects Micron to launch 16nm TLC in 3Q, with a majority of the output going to mobile. Samsung is currently readying 16nm TLC for volume, while Sandisk's mainstream 15nm TLC may not be ready until late 4Q.
    Supply chain expects Samsung's 48-layer 3D NAND to be ready by end of this calendar year. Micron/Intel is expected to launch 3D NAND in 4Q15 as well, while Toshiba should be in production in 1H16.
    Micron-specific catalysts include an improving cost structure in both DRAM and NAND for C2016, driven by node migration as well as new NAND architectures (TLC then 3D).
    Reiterating our $36 price target and Outperform rating on MU shares. Valuation remains attractive.
    Jun 18, 2015. 06:43 PM | 11 Likes Like |Link to Comment
  • Micron's 'Qualcomm Problem' [View article]
    Last year was $2.21 of FCF on earnings (non GAAP) of $3.33. This year credit Suisse has then pegged for $3.26 of non GAAP earnings and FCF at $1.72. It is a very capital intensive business
    Jun 18, 2015. 03:25 PM | Likes Like |Link to Comment
  • Micron's 'Qualcomm Problem' [View article]
    @doggie I am bullish like you but the dividends is not going to happen any time soon. Also you have to look at free cash flow not earnings for dividends, as that is less than profits.
    Jun 18, 2015. 02:55 PM | Likes Like |Link to Comment
  • Micron's 'Qualcomm Problem' [View article]
    I would respond, but then read @Bobcat9's response and thus I have no response except to say... What bobcat said. I would add one point. Memeory from other Mobil makers is going up a lot like lower to mid end phones in China and India.
    Jun 17, 2015. 05:49 PM | 6 Likes Like |Link to Comment
  • Micron Technologies: Tide Will Turn In Second Half Of 2015 [View article]
    @whitneyB - Russ is now positive on MU and and feels this will hit all time highs in the next 12-18 months.
    Jun 17, 2015. 11:42 AM | 1 Like Like |Link to Comment
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