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Technology Stocks : Micron Electronics (MUEI)
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To: MONEYMAKER who wrote (2697)12/19/1997 1:31:00 PM
From: jgercke  Read Replies (1) of 4074
 
Moneymaker,
MUEI made .92 last year, .69 year berfore that, .74 before that and .45 before that. This earnings history is not consistent with the statement that they don't know how to make money.
They have not managed their growth as well as all shareholders would have liked. And the market has punished the stock price as a consequence.
However, if you believe that they will return to reasonable profitability (as I do), their current share price is absolutely a steal. It seems to me that if/when that is done there is tremendous upside leverage for these shares. Their strong top line growth will allow them to increase EPS even if margins are permanently reduced from last year's level. This many not happen overnight, or in the current quarter, but when it is perceived that the company is back on track the share price will anticipate the actual earnings and should start to show healthy gains.
I ask myself what i think the company would be worth with forward earnings of $1.50/share with growth rates twice the industry growth rate, and I don't get $9.00.

Now I have lost a bunch so far on MUEI, having originally acquired in the 16+ range. However, I have been accumulating additional shares at these sale prices because I think the market has way overdone it in trashing this company.

Then again, I may be wrong.
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