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    Stock Alert for Micron Technology Inc. (MU)

    Micron Technology Inc. (MU) is a provider of advanced semiconductor solutions. Through its worldwide operations, MU manufactures and markets a full range of DRAM, NAND Flash and NOR Flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, embedded and mobile products.

    Share Statistics (26-Mar-12)   FY

    2010

    FY

    2011

    %

    Chg

    Q1

    2011

    Q1

    2012

    %

    Chg

    Symbol MU Revenue, $Mn 8482.00 8788.00 3.61% 2257.00 2067.00 -8.42%
    Current price $8.25 Gross marg. 32.00% 20.00% -37.50% 19.27% 13.00% -32.54%
    52wk Range: $3.97-$11.89 Oper. margin 8.59% -7.16%
    Avg Vol (3m): 30,592,000 Net margin 21.81% 1.90% -91.29% 3.19% -10.84% -439.81%
    Market Cap. 8.11B              
    Shares Outstanding 982.80M EPS, $ 1.57 -0.06 -103.82% 0.02 -0.22 -1200.00%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares in MU slipped 1.79% to close Monday trade at $8.25, with nearly 36 million shares traded.  Over the last 52 weeks, the stock has ranged from a low of $3.97 to a high of $11.89.

    MU shares have dropped 4.4% in the last five trading days; though the stock gained 3.8% in the last month.  Year-to-date, the stock is down 28.6%.

    MU saw a spike earlier this month after the semiconductor technology company, together with Xilinx Inc. (NASDAQ: XLNX), announced the first public hardware demonstration of an FPGA interfacing with RLDRAM 3 memory, a new and emerging memory standard for high-end networking applications such as packet buffering and inspection, linked lists and lookup tables.

    According to Derek Curd, technical marketing manager at Xilinx, the new RLDRAM 3 interface is ideal for Xilinx and MU’s mutual customers in the high-end networking space who require higher speed, higher density, lower power and lower latency. “The RLDRAM 3 hardware demonstration shows how we’re able to achieve a much more efficient transfer of network data.”

    “Xilinx has been a longtime partner of Micron, going back to the early definition efforts of RLDRAM 3 memory,” stated Robert Feurle, vice president of Micron’s DRAM marketing. “Together, we welcome the ability to demonstrate and deliver performance advantages of RLDRAM 3 with the latest Virtex-7 and Kintex-7 families.”

    MU also recently announced that it has developed a 2.5-inch enterprise solid-state drive (SSD) based on a PCIe interface. The solution combines a high-performance PCIe interface with a hot-swappable 2.5-inch form factor that creates new options for enterprise server performance scalability and serviceability.

    Source:

    http://investors.micron.com/releases.cfm

    Financial Summary

    MU reported net sales of $2.1 billion for its second quarter of fiscal 2012, compared to net sales of $2.1 billion for the first quarter of fiscal 2012, and net sales of $2.3 billion for the second quarter of fiscal 2011.

    The Company’s consolidated gross margin dropped to 13% in the second quarter of fiscal 2012, compared to 15% for the first quarter of fiscal 2012, due primarily to declines in gross margins for the Company’s NOR Flash products in the wireless market. Sales of NOR Flash products were about11% of total net sales for the second quarter of fiscal 2012.

    MU realized a net loss of $224 million, or $0.23 per diluted share, for the latest reported quarter, which compares to a net loss of $187 million, or $0.19 per diluted share, for the first quarter of fiscal 2012, and net income of $72 million, or $0.07 per diluted share, for the second quarter of fiscal 2011.

    Cash flows from operations for the second quarter of fiscal 2012 were $574 million. During the second quarter of fiscal 2012, the Company invested approximately $429 million in capital expenditures. MU ended the second quarter with cash and short-term investments of $2.1 billion.

    Source:

    http://investors.micron.com/releasedetail.cfm?ReleaseID=658982

    Financial Strength (26-Mar-2012)

    Company

    Industry

    Sector

    Quick Ratio (MRQ) 2.64 0.99
    Current Ratio (MRQ) 3.23 2.75
    LT Debt to Equity (MRQ) 23.40 10.77
    Total Debt to Equity (MRQ) 46.00 19.96
    Interest Coverage (TTM) 6.07 1.19

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    MU is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

    MU’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9minute moving average or signal line. This suggests that positive momentum has begun to slow.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Mar26-2012 symbol Share, $ $ Mn 2012 2013 2012 2013
    SanDisk Corp. SNDK 50.52 12.25B 10.77 9.24 1.9 1.62
    Spansion Inc. CODE 12.41 743.61M 15.51 7.71 0.77 0.72
    Semiconductor – Memory Chips Median       12.23 n/a 1.59 n/a
    Micron Technology Inc. MU 8.25 8.11B n/a 14.22 0.95 0.84

    Source: Thomson Financial

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