Micron Technology, Inc. (NASDAQ:MU) — On July 27, I reviewed MU and recommended that traders buy it under $15 with a trading target of $18. The next day MU opened at $14.85 and reached the $18 (or $17.86, close enough) target on Sept. 8, for a gain of over 20%.
In keeping with this week’s review of stocks that have successfully reached recent trading goals and are better buys on profit-taking, MU fits perfectly.
Since confirming a “W” bottom with a break-away gap in June/July, the stock jumped on high volume, forming a bull channel that reached our trading objective on Sept. 8. New traders should try to buy MU close to its 20-day moving average at $16.64 (green line) with a target of $20 for a proposed return of about 20%.
However, those who bought the stock on July 27 and have not taken profits should hold for a target of about $20, expanding their return to over 33%.
Micron manufactures semiconductor memory DRAM and NAND flash memory and image sensors. Its products are used in mobile products. It is a relatively large semiconductor company and the sole American survivor in the global DRAM industry.
The company filed an 8-K disclosing that it has adopted a rights agreement that would avoid an “ownership change” in the event that an investor takes a greater than 5% equity position in the company. Credit Suisse Equity Research (CS) believes that this increases the possibility of an investment or acquisition near term.
Recent rumors lead CS to conclude that China or Intel Corporation (NASDAQ:INTC) could be potential investors or acquirers. They estimate that MU’s investment value is $17-$22 per share.
Micron is on an August 31 fiscal year. CS estimates that MU will report a gain of 1 cent in FY 2016 and raised their estimate for FY 2017 to $1.32 from a prior estimate of 74 cents. Their price target is $20.
