Thursday, June 20, 2013

Investopedia: The Craziness Is Well Underway Again At Micron

As someone who has almost always had a semiconductor stock in his portfolio, I can tell you that you have to a have a loose screw or two to like this sector. But the memory chip space is a completely different wing of the semiconductor asylum, one where the peak-to-trough cyclicality is truly impressive and where long-term economic returns are difficult to earn.

That has led to a pretty “challenged” existence for Micron (NYSE:MU), and a stock that has been all over the map. With the industry consolidating down to just four major suppliers, though, the thought now is that the players will operate on a more rational basis and allow each other to actually book some respectable earnings and cash flow. While I think Micron's shares have room left to run on investor enthusiasm, it's tough to outline a fundamental case where the stock is significantly undervalued for the long term.

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