Summary
- The stock is trading at an EV/EBITDA of 3.6x.
- The decline in DRAM prices have hurt performance and the stock price. There is a growth story developing with potentially very hot new products in the next few years.
- INTC cooperation appears solid and Samsung will not initiate a price war.
- The stock is still cheap even with 2016 or 4Q15 annualized numbers. Note that analysts expect a rebound in 2017. The stock is a buy.
EV/EBITDA has the best backtest results among the popular market multiples. In a sequence of articles, I will present companies with EV/EBITDA of less than 4x.
Brief Description:
Micron Technology (NASDAQ:MU) manufactures flash memory (DRAM and NAND) and other semiconductor devices. Flash memory, which is MU’s main business, is essentially a data storage product used in numerous devices such as phones, servers, watches, etc.
Sales and EPS Growth:
5-year sales per share: +10% per year
5-year comparable adjusted EPS: +14% per year
1-year sales per share: 0% per year
1-year comparable adjusted EPS: -17% per year
The breakdown in sales is shown below. As you can see, DRAM and NAND make up 95% of sales.
To read the entire article go to: Low DRAM Prices Present An Opportunity To Get Long Micron
