Micron: Facing A Weak Memory Market And Relatively Overvalued Vs. Peers (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• My bearish view on Micron has been ill-timed as the stock has rallied hard since, prompting me to revisit my views.
• I still expect weakness in the traditional DRAM and NAND memory markets due to slow demand from smartphones and PCs and pricing pressures driven by Chinese competition.
• But Micron is well positioned as it focuses on higher-value DRAM markets so it is somewhat insulated by Chinese competition. And it is winning market share from Samsung.
• MU's P/B valuations indicate relative overvaluation vs its memory market competitors. The relative charts of MU vs SPX show a cloudy outlook ahead as buyers and sellers seem balanced.
• SK hynix has been getting a leg up over Micron in the HBM deployment race, but Micron is making efforts to catch up. This is a key monitorable as the HBM opportunity is a major incremental growth driver.

Read the full article here.