Disappointing. With all the talk by analysts about how great Micron is, they don't seem to be able to generate the buying enthusiasm that their words convey. At approx 10 p/e after this upcoming er, and almost 9 times forward p/e one would think that this price is a steal and buyers would be minimizing any downside, but it flounders. Maybe that is exactly what the institutional buyers want, a real yawn and then they come in droves when nobody expects it, catch shorted shares off guard and before retail investors can jump on board and before HFT kicks in to the upside. In any event, volumes this low create the very environment for any pegging. Have a nice week end. Next week should be interesting, have no clue where Micron will end up price wise.
Granted Micron has had a nice run for the last 2 years, but a 10% correction with almost constant good news is sometimes hard to comprehend, although some say that is healthy for a stock on the rise. Interesting fact to pass the time on this boring volume day is that a year ago September 2013, Micron went on a 30% price rise during that month alone. Granted that the Elpida purchase and Einhorn taking a large position were news headlines then. So what will it take for Micron to regain trajectory? A great er and forward guidance? A significant improvement to the balance sheet by paying off the convertibles? Foster being replaced due to his possible incompetence? Micron announcing a new sales partnership with another major player? Something has to create some renewed sizzle to get the ball rolling like it did in 2013. Micron's stock price should eventually improve, the question is how much, how high and when, and what factors will impact that.
First, Zacks said in an article today that the fiscal 2015 eps should be around $3.57. If Micron's forward guidance confirms this, then the forward p/e will drop to 8.97 based on today's closing price. Also, when the er happens in 2 weeks, if Micron meets expectations of 80 cents non GAAP, then the current e/r will drop to 10.42 based on today's closing price. Both these numbers are incredibly low for a stock with such potential. Someday institutions might feel that Micron should sport a higher p/e and that can only increase the stock's price. However as we all know, that day has not come yet.
Now the other news I just saw is that the short interest as of 8/29/14 dropped from 8/15 to 101.3 million shares from 105.1 million. However, because the volumes have been so anemic lately, the days to cover rose to almost 7 days from the prior approx. 4 days. Micron has not been above 6 days to cover for over a year, and that says that IF Micron starts to rise on the current anemic volume level, this stock may vault faster upwards than it normally would if shorted positions try to cover. Of course an increase in selling trading volume would mitigate any short buying price rise but it is still another positive for Micron.
So, the positives are all lined up for Micron but the stock price still does not reflect this. That is the wild card mystery. Enjoy!!
lately it doesn't seem to matter if any investment advisers reiterate upper PT. They talk a lot but their clients do no seem to be buying in droves, volumes recently have been below average for over a month, not a great sign for a stock that has a PT above $38 on average. In the past Micron would rise when the market fell, it did it's own thing. Those trends needs to re-establish for Micron to go higher. Just when one thinks it is ready for a break out, it falls $1 or more in one day. That is a new dynamic and one that is concerning.That too must change IMHO.
So, has the Sept 4th UP gap of $31.69 to $31.83 been filled?? You hinted that gaps usually get filled in a recent post. At that time Micron was near $33, and it was hard to fathom it falling in 2 days like it has. Someone bailed from yesterday around 2pm until the first hour of this morning as there were almost 2 million shares to the downside traded in that 3 hour span. Maybe Einhorn lightening up more, who knows. In any event Micron is acting erratic again just when I thought it was poised for a break out 2 days ago, but for now that thought is tabled.
Micron now has an ER of 9/25, almost 2 weeks earlier than the estimated date of early October. Thus, in a little over 2 weeks from now, the P/E ratio will drop from where it is at now due to replacement of a lower eps with a higher one. That is another tail wind for Micron's stock price.
Yesterday, with the stock price over half a dollar higher, a break out was flashing, however, this downturn today puts that flashing signal on hold for now. Of course that can reverse at any time. Volume is still not that impressive and for a company with so many positives, something is holding the buying volume back for now. Again, that may also change real soon.
So, where will Micron be let's say in a month from now. If it can soon break the $34.30 ish upper resistance range, then $35 to $37 is not out of the question. IMHO it should be testing that soon.
My philosophy on how many stocks to own is the same but for a different reason. It is easier to get to know the total ins and outs of a few, all the nuances, the way they trade when you concentrate on a few than many. It has worked well for me so i stick to it until that method starts to fail. So far so good.
Major trading houses set their computer trading to algorithmic patters and price points. These are the heavy hitters and if Micron trades above the triple resistance upper boundary line of $34.31, it will trigger these buy points. Whatever gets it there, whether it is a news article, Apple release, etc., brings about the trend, and the expression the trend is your friend is followed by many outside this board. These are not your retail traders, they are the institutional ones and the hedge funds. They are the ones that truly move this stock with multi million share trades. This is not hype, it is fact. The chart should be watched, as well as news events. I will watch both. JMHO
Unless there is a world event that derails the stock market over the next week or two, my indicators are flashing "break out " if it breaks above $34.31 ish, from a triple resistance range. There are no known resistance points above that, although new ones will form. So, we are getting very very close. Also, keep in mind if this happens, it may be a very fast pop due to some shorted positions covering. To those TA folks, a cup and handle has formed and a breakout is now occurring above the handle. To those who just like trends, it appears like a short and intermediate uptrend. These are just my opinions but I think there is some validity here. Oh, and the fact that earnings may surprise a bit, that may bring in before the ER buying. If volume starts increasing beyond the last 4 week average, this will assist in any uptrend. Enjoy.
gutsy move mike. We are all great in hind site, lol. If we had that gift, you, me , high and everyone else would have bought 1 million shares when Micron was in the single digits. And today, we could be sipping wine on our own island, with a big boat and lots of , well, I will leave the rest for imagination. Just look at today and what you might do tomorrow, not back. LOL Enjoy. Next week we start again.
I hear ya. Did you sell your core MU position a while back and now just day trade it? I am still holding my core and trading around it. I think that it might close just shy of $33, but there might be a 3:59 pm pop, who knows, lol. Enjoy the weekend. Dream : )
Geesh Hi, thanks for that concise explanation, lol : ). Just goofing on you. Glad to see you back, missed your posts. If Micron can continue an uptrend for the next week or so, up towards the 52 week high, I bet that a good number of the shorted positions will start to cover not wanting to wait around for a possible earnings beat and possible stock continuation uptrend. JMHO.
Cruise, what they, and Crammer and others with this view keep failing to comprehend is that the demand side is outstripping the supply side. If Samsung Hynix and Micron don't increase the supply side, then that wouldn't be good business. Dram spot prices skyrocketed the last few months ( cooled a but recently ), but that did not have any noticeable difference on the Big 3 revenues. Nor will spot declines to more normal levels. Supply increases still will not catch up with demand, so I can't see an argument that Dram prices fall, they may stabilize or go slightly higher.
But the other item that these articles that talk about Samsung increasing supply is that in the last CC, Samsung even said they couldn't keep up with demand and didn't want to lose customers to the competition, so they would maximize existing lines to keep customers, BUT not at the expense of margins. Also, Samsung just raised Dram contract prices in July. They could only do that if demand is greater than supply .
So, these articles make no sense given what the big 3 are reporting and saying.
Volume in Micron stock is weirdly low, and as such any selling or buying uptick can exacerbate the move. This company has too many tailwinds behind it to worry, for now. JMHO
Couldn't agree more. With all the hype by analysts stating it is a screaming buy at these levels, where is the buying?? Something has been going on the last few weeks, low volumes, more downward pressures, etc. that makes one question the logic. Low volumes also allow for manipulating the stock price to end at a certain point to benefit those needing it there. All this week I was waiting to see if this would happen again, just like the last 2 weeks, and maybe today it will happen again to the downside, tomorrow being expiry. Sure hope I am wrong about the reasons behind these questionable moves. JMHO
That was actually funny Cheetah, good one. The 50 DMA could be the catalyst for the next leg up signal to those analysts/ investment houses that were too concerned this past few weeks over the downturn. I just don't see much downside to the stock price given the strong fundamentals and chip demand/supply imbalance favoring stable to higher prices and sales. Free cash flow is such that Micron can/should pay down more debt and make it's balance sheet that much more impressive. BTW, if Foster, whom I think displays financial ineptitude, would pay down debt instead of restructuring it, he could have gotten much more favorable rates from the rating bureaus for the bonds he restructured. It made no sense the way he did it, kind of backwards thinking. He also never had to sell the toxic convertibles in the first place as Micron had enough cash/equivalents/ bank resources to pay for any of it's needs. Sorry, I got off track. Anyway, the 50 DMA must be breached strongly to the upside for this uptrend to have legs and not look back. What do you think?
I think you answered your own question. "I would be fairly happy to get called on the 2 blocks at those prices." So, do it. If you don't get called you win, if you do, you are happy.
If Micron can keep turning higher today or the next few days, it will be interesting to see how the stock price acts if it hits the 50 DMA. A move past that mark may signal an end to this most recent down turn, and signal a renewed uptrend to the next level. JMHO
IMHO Micron should focus on eliminating as much debt as economically beneficial before they do any further acquisitions, unless the acquisition will be immediately eps accretive. Micron should not miss this opportunity to strengthen it's balance sheet as much as possible. It may only take two or three quarters of solid free cash flow to accomplish the above. Once the debt is at the minimum, then Micron should focus on possible acquisitions, but preferably stock buy backs. These actions will put a continuous floor of support under the stock price as it rises higher than it is today. The last thing Micron should do is pay a dividend as this will eat up cash flow without the benefit of accretive eps. Eventually the stock price increases might hit a wall. JMHO
Codi, think about what you just wrote. The "game" which appears to be very valid and not against any SEC rules or else they would have banned this. Valid manipulation by deep pocketed trading entities, which sometimes throws out the fundamentals and technicals too. Depending on which side of a trade one is on, the results on expiry Friday's can be helpful or nauseating. What is troubling is, where are all the analysts who scream buy but are not either buying or having massive client buying while this trades where it is at today? The answer is not they are waiting for lower prices because they have stated this is a $40+ stock, and they should not be allowing any price drop like this. No stock goes straight up but a 10%+ drop for a stock with this strong of fundamentals and future supply/demand dynamics as they are should be bought on any dip, from here to the high $30's. So, this last week or so has a much deeper issue that has not been made public. Maybe a large fund is lessening their stake and taking profits ( i.e. Vanguard ) given the world uncertainties. Whatever it is, the "buy" analyst crowd has not stepped up in actions, only words. I agree with you, let's hope fundamentals return and displace the distractions surrounding it.