Market Close
$228.50
$13.45 (5.56%)
Volume % Chg:
26%
Buy Point:
$128.60
Position Size:
Quarter
Buy Range:
$128.60 - $135.03
Current Action:
Micron found support after pulling back to the 21-day exponential moving average amid heavy selling Tuesday. It had been showing unusual strength, rising to all-time highs while the Nasdaq has pulled back more than 6% below its peak.
Leaderboard Analysis:
The Leaderboard stock got trimmed to a quarter position from half on Sept. 24 after shares fell through its short-term 10-day line. But since then, MU has since rallied back without even testing the 21-day line. Ahead of earnings on Sept. 23, Micron was hedged for half of the position with a Sept. 26-expiring 167.50 put option. After the close, Micron rose 4% after the hours as it posted solid earnings of $3.03 a share, beating all 25 analysts' estimates posted on Yahoo Finance. Sales were strong at $11.32 bil, $160 mil higher than the consensus estimate. To hedge half of the position, 1 put contract gets bought for every 100 shares owned long. The hedge allows Leaderboard to maintain a half-size position. On Wednesday morning, the put hedge got sold ahead of expiration after MU held above the 10-day moving average. Micron Technology was added a half-size position Sept. 9 as it cleared a cup-with-handle buy point. It hit its 20% profit goal just two days later following a price target hike from Citi, which triggered the eight-week hold rule. This is a first-stage pattern for Micron. IBD research has found early-stage formations are more likely to net good gains for investors. The stock ripped almost 87% higher from recent lows to the left side high of the new consolidation.
Backstory:
The maker of computer memory components is enjoying strong demand for products for solid-state drives, auto systems, cloud and enterprise networks. Annual figures show a lot of cyclicality. Earnings are expected to explode 103% this year before turning in 16% growth in 2026. The Boise, Id.-based company also pays a small dividend, yielding 0.2% annually. Micron on Sept. 23 announced record for the August-ended quarter, "driven by pricing execution and strong performance across end markets." In fiscal 2025, revenue jumped nearly 50% to $37.4 billion as gross margin surged 17 percentage points to 41%. "This performance was supported by the ramp of our high value data center products and our broad-based DRAM pricing strength across end markets." Micron also noted that its datacenter SSD (solid state drive) business hit record revenue and market share during the fiscal year that ended in August. In Q4, the company notched non-GAAP net income of $3.47 bil, or $3.03 a share, while operating cash increased 24% to $5.73 billion. Adjusted earnings leapt 157% to $3.03 a share; net margin was 30.7%. Morgan Stanley recently raised its price target on MU to $325.
No comments:
Post a Comment