I’m counting down the days. After the closing bell rings on Wednesday, June 20, one of my top technology companies will be reporting its third-quarter operating results. With the stock trading at less than 6 times future earnings, it is a fantastic buy right now. But you’ll need to act quickly, because I expect this memory play to surge after earnings. Here are the complete details….
Micron Technology, Inc. (MU) started as a mere four-person company crouched in the basement of a Boise, Idaho dental office in October 1978. Micron Technology created various widely-accepted DRAM (dynamic random-access memory) products over the decades, and became publicly listed on the New York Stock Exchange in 1990.
Of the company’s many major milestones, one notable milestone is their acquisition of Texas Instruments’ memory operations in 1998. This move made Micron Technology one of the biggest memory producers in the universe. So it’s no surprise that 40 years after its humble beginnings, Micron Technology has exploded into a global pioneer in the semiconductor industry, with more than 34,000 employees spanning across 20 countries.
Micron Technology’s memory and storage technologies can be found at the heart of countless technological devices used by millions of people every day, from smartphones to laptops, to automotive GPS devices, drones and ultra-high definition television sets. With their devices helping to provide memory and storage for an array of electronic applications, it’s no wonder that the company boasts the broadest memory solutions portfolio in the industry and owns more than 26,000 patents.
Micron Technology has been successful in growing sales and earnings, and is uniquely positioned to benefit from rising memory prices. Plus, company management noted that secular technology trends are driving robust demand for its memory chips and storage solutions, and that the company is positioned to take advantage of these opportunities.
So I can’t wait for Micron’s third-quarter earnings report, which is scheduled for after the market closes on Wednesday, June 20. Right now, analysts are forecasting $3.12 earnings per share on $7.75 billion in revenue. This translates to 93% annual earnings growth and 39% annual sales growth.
Then again, Micron Technology has posted earnings surprises for the past several quarters running. Also, analysts have revised their EPS estimates nearly 20% higher over the past 90 days. All of this suggests that Micron Technology will likely beat expectations again.
I must also mention that the company is in the process of buying back $10 billion of its shares. This is the largest buyback in the company’s history, representing about 16% of the company’s current market value. This share repurchase program is part of the company’s overall plan to return at least 50% of its free cash flow to shareholders over the next few years.
MU is one of my A-rated stocks in Portfolio Grader, and I currently recommend it in my Growth Investor newsletter. Since I added this stock to Growth Investor in April 2017, the stock has gained a stunning 138%, well above the Dow’s gain of 20%.
I expect it to post stunning earnings next Wednesday, so now would be a great time to buy the stock.
P.S. If you’d like more information on MU, including my current price limit for the stock, you can access it through a risk-free trial of Growth Investor.