Are You Too Late For The Micron Technology Turnaround?

| About: Micron Technology (MU)
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One of the S&P 500 Large Cap stocks that is expected by Wall Street analysts to turn around this year is Micron Technology (NASDAQ:MU). The company is a semiconductor and related devices manufacturer with a Market Cap of $17.74 billion, revenue of $8.23 billion but net losses of $1.03 billion in the last year.

This year however, the stock has far outstripped the market as measured by the Value Line Index and while the Index gained 10% in the last 6 months MU shot up over 72%:

Fundamental factors:

  • Market Cap $74.17 billion
  • Revenue predicted to grow by 59.90% this year and another 6.20% next year
  • Earnings are estimated to increase 1,327.80% this year, an additional 10.00% next year and continue to increase by an annual rate of 18.10% over the next 5 years
  • Financial Strength is B

Investor Sentiment:

  • Stock very popular with professional investors and 96% of the float is held by institutions
  • Wall Street analysts have issued 8 strong buy, 8 buy, 14 hold and only 1 underperform recommendations to their clients
  • I measure the individual investors' sentiment by comments expressed on Motley Fool and 1,320 of their readers gave the stock a 90% chance to beat the market
  • The short sellers are starting to cover their positions and since the middle of September lowered their short positions from 112 million shares to just over 92 million at the end of the month

Technical indicators and charts provided by Barchart:

  • 67% Barchart long-term technical buy signals
  • Trend Spotter buy signal
  • Above its 50 and 100-day moving averages
  • Weighted Alpha is 207.36+
  • 198.44% price increase in the last year
  • 5-year total return of 220.00%
  • Relative Strength Index of 52.33%
  • Barchart computes a technical support level at 17.83
  • Recently traded around 17.25 with a 50-day moving average of 15.64

Peer comparisons:

Although some of the other companies in its sector are much larger Micron Technology's stock price is beating them out. In the last year Texas Instruments (NYSE:TXN) with a Market Cap of $42.66 billion was up 47.80%, Taiwan Semiconductor (NYSE:TSM) with a Market Cap of $89.49 billion was up 17.25%, Intel (NASDAQ:INTC) with a Market Cap of $112.54 billion was up 5.84%, but MU beat them out with a 198.44% gain:

How should you play this stock since analysts have predicted a turnaround and that expectation looks to be fully valued in the stock price already? If you are already in then I'd advise you to watch the 100-day moving average to see when to reap your profits. If you would like to get in now during the recent market weakness then closely watch the 14-day turtle channel and 50-day moving averages for short-term price swings:

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MU, INTC, TSM, TXN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.