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Five Reasons Micron Is Held Up Only by Hope


What's the next catalyst?

To be honest, I haven't been the biggest fan of Micron Technology (MU). A simple look back at some of my previous comments on the stock are evidence of that. However, to the company's credit (and despite my pessimistic views), the stock has actually done quite well. In addition, estimates have been rising, which is a positive thing.

But I'm still not into it, regardless of recent performance. Here are some of my thoughts ahead of the company's first-quarter earnings report, which is due out on December 22. (My apologies in advance to the Micron bulls for the sarcasm.)

1. Micron has done quite well, it's true. It must be because it's been whipping the tail off of Street estimates. Or not. In actuality, it's missed expectations in three of the last four quarters.

2. Perhaps it's because the company is expected to kick out some big-time earnings this year. Nope -- that's not it either. The Street is at a mere $0.32 for this year, which isn't anything to get excited about. What about the $0.64 the Street is expecting for next year? I'll believe it when I see it as that's a long way away. As far as its first quarter is concerned, analysts are looking for $0.06. I'm mixed on whether or not I think it will hit that number, but does it really matter?

3. It can't be the company's huge cash position that's drawing people in. A quick look at the 10K shows that at September 3, it had just under $1.5 billion in cash and equivalents. That's under $2 a share by my math. That's not terrible, and I wouldn't mind having access to that kind of flash, but isn't anything to write home about, either.

4. With the market up roughly a gazillion percent since the March lows, I have no interest in the stock.

5. Of course, maybe there's some huge catalyst on the horizon that I don't know about. But if not, I'm concerned because I don't see what's holding up the stock here besides hope.

Have a great day!
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No positions in stocks mentioned.

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