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Technology Stocks : Semi Equipment Analysis
SOXX 312.18-0.2%Dec 9 4:00 PM EST
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To: Donald Wennerstrom who wrote (80958)9/5/2018 7:27:59 AM
From: Sam  Read Replies (1) of 95546
 
"truly weird". This seems like the best explanation to me. Although it still seems weird to me to punish Micron seemingly exclusively.

What's Happened To Micron Technology Lately?
Sep. 4, 2018 2:06 PM ET
Kwan-Chen Ma

Summary
  • Micron’s shares have routinely traded 30% below Street analysts’ price targets. The undervaluation has recently widened by another 20%.
  • The mispricing or selloff cannot be explained by the subsequent analysts’ upward revisions of future financials, nor by the strong data center demand for the DRAM chips.
  • Micron’s 20% loss occurred in response to Trump’s tariffs announcements, as investors have priced in a trade war risk premium.
  • Once the uncertainty of the trade war impact is removed, Micron shareholders should get that 20% risk premium back.

By now, it probably does not need to take Electric Phred or William Tidwell to tell you that Micron Technology’s ( MU) shares are undervalued. After upbeat Q1 and Q2 earnings announcements, Micron’s stock has lost more than 13%. As the stock has consistently dropped 25% below Street analysts’ price targets in the better part of 2017, the mispricing proceeded to increase to over 50% in recent months (Figure 1). The increasing undervaluation seems more perplexing since the MU’s prices were actually falling in the midst of analysts raising their price targets (See circles in Figure 1). Looks like there is something at work to explain the falling MU prices.

continues at seekingalpha.com
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