Investopedia: Is Micron Bull Bait Or A Value Trap?

Looking at Micron's (NYSE:MU) results from Thursday evening, it is pretty clear that the chip market is not healthy. With memory chips filling such a fundamental role in so many devices, it does not seem out of line to say that "as goes memory, so goes chips." While memory has always been a volatile sector, there was not much in the Micron release to suggest that a big turnaround is on the way soon. And yet, with the stock trading at such an unchallenging multiple, it is worth asking if Micron is nevertheless a value today.


A Ragged Fiscal Third Quarter  
There was not much in the way of good news in Micron's fiscal third quarter report. Revenue fell 5% on a sequential basis and 7% from last year's level. In truth, there wasn't much strength anywhere. NAND sales fell 5% sequentially (with ASPs down about 5%) and DRAM sales dropped 7% despite a small uptick in price. In terms of operating units, Embedded Solutions and Wireless Solutions were strongest, which is not altogether surprising given the relatively better market for chips in automotive, industrial, server and mobile applications.

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