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How Did Micron Technology Perform Compared to Its Peers?

Gabriel Kane

US Equity Market Update for October 1, 2015

(Continued from Prior Part)

Micron and its peers

An analysis of Micron’s income statement in 4Q15 follows:

  • The net profit margins of Micron Technology (MU), Intel (INTC), IBM (IBM), SanDisk (SNDK), and Rambus (RMBS) are 13.08%, 20.51%, 16.94%, 6.54%, and 9.42%, respectively.

  • The EPS (earnings per share) of Micron, Intel, IBM, SanDisk, and Rambus are $0.42, $0.55, $3.57, $0.38, and $0.06, respectively.

An analysis of Micron’s balance sheet in 4Q15 follows:

  • The current ratios of Micron, Intel, IBM, SanDisk, and Rambus are 2.20, 1.97, 1.27, 1.80, and 11.66, respectively.

An analysis of Micron’s valuation follows:

  • The PE (price-to-earnings) ratios of Micron, Intel, IBM, SanDisk, and Rambus are 4.92x, 12.71x, 9.57x, 22.27x, and 47x, respectively.
  • The PBV (price-to-book value) ratios of Micron, Intel, IBM, SanDisk, and Rambus are 1.27x, 2.48x, 10.31x, 2.06x, and 3.21x, respectively.

According to the above findings, the peers have outperformed Micron Technology based on the current ratio, PE ratio, and PBV ratio.

ETFs that invest in Micron Technology

The PowerShares Dynamic Semiconductors Portfolio (PSI) invests 5.39% of its holdings in Micron. PSI uses a quantitative model to select and weight semiconductor companies.

The Market Vectors Semiconductor ETF (SMH) invests 3.70% of its holdings in Micron. SMH tracks a market-cap-weighted index of 25 of the largest US-listed semiconductor companies.

The iShares PHLX Semiconductor ETF (SOXX) invests 2.81% of its holdings in Micron. SOXX tracks a modified market-cap-weighted index of US-listed semiconductor companies.

Comparing Micron Technology and its ETFs

An analysis of Micron’s price movement follows:

  • The YTD (year-to-date) price movements of Micron, PSI, SMH, and SOXX are -57.81%, -7.35%, -8.68%, and -11.34%, respectively.

An analysis of Micron’s valuation follows:

  • The PE ratios of Micron, PSI, SMH, and SOXX are 4.92x, 25.36x, 15.60x, and 19.64x, respectively.
  • The PBV ratios of Micron, PSI, SMH, and SOXX are 1.27x, 2.77x, 3.08x, and 3.08x, respectively.

According to the above findings, the ETFs outperformed Micron Technology based on the price movement, PE ratio, and PBV ratio.

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