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Technology Stocks : Micron Only Forum

MU 237.16

+4.6%

Dec 5 9:30 AM EST

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To: Grim Reaper who wrote (6103)	12/14/1996 11:47:00 AM
From: Bipin Prasad	of 53903

My puts have suffered a slight decline. But I am not a day-trader. I need not remind you that Micron has 213 million shares outstanding. Sales from the last quarter was $700 million (DRAM was half of that). If you take P/S of 1.5 peak, then the high price is: 700 * 4 * 1.5 / 213 = $ 19.71. With P/S of 1 it is: 700 * 4 /213 = $ 13.16 At the current price, the hope for a bright future is already built in. At $35 and its traditional P/E of 12, they would have to earn $3 per share next year. So a lot of hope has already been built into the current price. Meeting analysts expectations is not going to cut it. This stock price reflects 2 to 3 times the earnings predicted by the analysts. If the earnings are flat, then we can conclude some things without even looking at the earnings report. 1. PC Sales went up from last quarter (FACT) 2. Since the total is the same, the DRAM revenues declined even further (and this inspite of the price spike for one month). (CONCLUSION) So this is not a growth company, except for the MEUI component. $13 to $19, means an average exit at $16 seems reasonable.

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