Larr, from briefing.com:
13:20 ET ******
MICRON TECHNOLOGY (MU) 35 5/16 +2 15/16. The shorts continue to get hammered on this one. MU is the most heavily shorted stock on the New York Stock Exchange, with a total of 43 million shares, or fully 36% of its float, sold short, and the number has been increasing every week. Of course, the bears are their own worst enemy in this case. As of late, whenever a brokerage firm has made a positive comment on the stock, MU shares have raced higher on the session. Today was no different, when NB Montgomery Securities issued what is perhaps the most bullish outlook for chip maker since last summer. The stock has soared to intraday high of $35.75 following a dramatic hike in the company's 1999 earnings estimate by NB Montgomery Securities. The firm raised its forecast from $0.75 a share to $2.00 a share, a modest adjustment of 167%. Although we do not currently have details of the move, you can be sure that the rosier expectations are based on improving DRAM prices. Of course, everyone on the Street has their opinion on which way the commodity will move, and the numbers vary widely. Given that Micron is slave to DRAM prices, it is not a stretch to extrapolate analysts long-term forecasts for the commodity by looking at earnings estimates. 1998: High estimate= $0.26; Low est= $0.68; Mean est= $0.09; 1999: High est= $1.60; Low est= $0.40; Mean est= $1.07. To further put the crap shoot of predicting DRAM prices into perspective, remember that it was only five months ago when Merrill Lynch analyst Thomas Kurlak was a raving bull on Micron and predicted the company would earn $4.10 a share in 1999. Now, the analyst can't stand to see the ticker symbol come across his terminal, and currently has a downside price target of $20 on the stock, which was issued Jan 16, when the stock traded around $31.50. Despite the recent action in MU shares, I wouldn't count Mr. Kurlak out of this horse race quite yet. |
