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Is it analyst or analyst i can never figure that out holy smoke is guys em new stock made a big downward move today micron is a stock out a lot of you guys out there own or have been looking into buying it’s a super low p/e company it has been reporting phenomenal numbers an investment bank and analyst from an investment bank came out today very negative on it we’re
Gonna look at what he said i’m gonna give you my opinion on what he said also jim cramer came out and made some comments about mu today stock had a very bad day as you see and i’m gonna kind of share my opinion on all this it’s now below $50 this was a stock that was over $60 just what was that about two weeks ago or so it dropped around six and a half percent today
Around three dollars and fifty five cents and so here’s what the analysts had to say sure as a micro nerd down thursday after analysts at ubs initiated coverage of the stock with a sell rating okay accelerating the analysts led by timothy whatever his last name is has a negative view of micron due to the cyclical memory concerns and big estimate cuts this guy says
He mishit it coverage on micron along with many other companies in the semiconductor industry in general he wrote the supply chain has struggled to keep inventory growing anywhere close to revenue growth during the past of four quarters and entirely in the second half of 2017 this has helped fuel a very favorable cyclical backdrop for the sector with respect due
To revenue and margins but this factor is rapidly waning and will likely shift to more of a headwind in the second half of 2018 alright and he also initiated coverage on a bunch of other stocks and whatnot so first let’s talk about what his comments i won’t get to the jim cramer ones and i’ll just kind of give you my full opinion so he’s basically he’s saying what
Everybody already knows like memory could potentially weaken in this in this the back half of 2018 i think even you know people that are bullish in the stock like understand that is definitely a possibility that in the second half of 2018 prices could weaken a bit and that could maybe hurt profits a bit but there’s there’s this is stock right now and we’ll look at
This pe it’s an unbelievably low pe i believe on the forward p/e basis it’s under five okay so unless you’re you’re expecting prices to drop through the floor alright this is a stock that still is insanely undervalued when you look at it compared to anywhere in the market so unless you’re expecting pricing just fall out through the floor and just go completely bad
This is still a very very cheap stock we’ll look at some of the statistics in just a minute okay he says flash has peaked okay he says dream no but flash has peaked so his opinion if micron stock is gonna go up basically dram needs to stay very strong because flashes now peaked in his opinion it’s not you know prices aren’t gonna you know go higher from here and
So his opinion on the stock his dream has to continue to stay strong for several quarters in order for the stock to go up more that’s interesting that’s interesting that’s that’s his insight and that’s what he believes okay so let’s look at the current year analysis you’re expecting around $11 per share eps all right there’s a stock that’s under 50 bucks right now
Eleven dollars in eps next year they’re expecting they haven’t notice on average who are also very bullish right they’re expecting around $10 in eps next year which is down around a dollar okay you look at revenue the expected revenue to be slightly up you know next year in 2019 obviously this year is supposed to be you know another stellar year there so even you
Know super bullish analysts are still expecting next year to not be as good as what 2018 is gonna be okay that’s what everyone’s expecting now on the flip side no one’s expecting this company to do better in 2019 than 2018 that sets it up in a in a really good position in terms of everyone’s expecting next year to be worse for micron than this year if micron can
Have a even better year in terms of eps next year imagine what that can do for the stock an imagined way that would flip the script there because everyone’s expecting not much next year you know a down year and if they can flip the script somehow it’s actually a more positive year that is huge guys now this stock have we already looked at you know the trailing p/e
On this one it’s under 8 right now okay trailing p under 8 forward p/e on five on this one okay under five in the way i think about micron i micro it has two big competitors okay one is that company named sk hynix or whatever the other main competitor they have out there is samsung those are the two main competitors it’s kind of a three horse race in the memory
Game all right especially when you’re talking about flash and you’re kind of talking about dram those was a three-horse race and everybody’s kind of behind there in the way i kind of think about their business it reminds me a lot of like the oil and gas sector okay it’s in need-based business i almost think about micron is like an exxon what what exxon mobil kind
Of represents to you know oil in oil products i kind of think a micron representing that in in the memory space you know exxon mobil is a company here that you know their profits can go down big-time as long as you know oil prices go down we look at exxon mobil one year they’re doing 16 billion dollars in profits right the next year they’re doing seven point eight
And then this past year they jump up to nearly twenty billion dollars in profit you know that’s the type of company i kind of think about but exxon mobil this is a company you know oil and gas sector these companies traded in the 16 you know pe range so i say to my car and i’m like how is this one being disrespected so bad in terms of the way this company is being
Valued by wall street it’s a 5 pe on this company below a 5 for pe on this company a company that almost no one out there is expecting prices to drop through the floor and this just become an unprofitable company overnight or things like that think about in this respect if microns prophets were halved overnight if their profits were halved over night we’re still
At a company that has a 4 p of what 10 and that’s if they you know they were cut in half overnight they’re still around a 10 that’s still way below what the markets trading at and stocks on average okay so in my opinion this is a type of stock in my opinion that deserves to i haven’t have a higher multiple on it unless you’re expecting prices to fall through the
Floor and i almost see no analyst that believes you know or anyone out there that believes you know pricing is just gonna fall through the floor and you know everyone’s just gonna start producing massive amounts of you know memory and whatnot and it’s just gonna tear the price apart i don’t really see that guys but at the same time it’s not a stock i own it’s not
A stock i own it’s a stock i paid very close attention to i know it’s a stock a lot of you guys own there it could be potentially a stock i owned at some point in time especially now that it’s dropped under $50 at this point could potentially be a stock i add i love the way micron has gotten that balance sheet much more focused they’ve really been cutting down on
The debt that’s really big especially for an industry where pricing can change that is something everyone knows well what the analyst brought out in my opinion today was no new information and yet the stock dropped six and a half percent there’s no new information there everyone knows every single person that’s in micron stock unless they’re completely clueless
And they’re just trying to get it for a trade or whatever everyone in micron stock knows that pricing could weaken in the back half of 2018 everyone knows that that is no surprise to anyone so the fact that he comes out and says it puts the celebrating on the stock if fall six and a half percent that’s just wall street for you sometimes guys that’s just the way
It goes so i will see what happens when micron over time but i can tell you that company is printing money right now they’re you know making money hand over fist and they should continue to throughout at least 2018 more likely into 2019 and you know what most people are expecting for 2019 is maybe a slight dip in profits but still if that company earns $10 in eps
Is that really the end of the world $10 in eps and the stocks trading of $50 that’s not so bad guys that’s not so bad so anyways i really want to know your guy’s opinion on mike ronnie is this a stock you own there’s a stock you’re planning on looking into maybe buying this is a stock you already own and you’re buying more shares did you sell off because he came
Out with this celebrating i really want to know your guy’s opinion down there in that comment section on micron stock i would love to hear it but anyways i hope you guys enjoyed this thank you for watching make sure you follow me on instagram and have a great day
Transcribed from video
Big Investments Bank says "SELL MICRON STOCK NOW' By Financial Education