I read on another thread about this company posting earnings today (~ $2.00 a share). However, the price of the stock seems to be going down, not up with this presumptive positive news.

My question is, what causes a stock to do this with supposed good news just ahead?

One factor is the price to earnings ratio. If the stock costs $100 and is only earning $2 that's not very good. I think a P/E of in the teens (13 to 19) is considered normal, but I'm no expert.

The SOX is down today with a combination of MU growing over 7 dollars a share the last quarter. AMD performed similarly last quarter, growing from 10 to 14 a share and dropping immediately back down based upon a slight reduction of expected Q4 products.

I would basically align it to being over bought, keep following the stock bc it'll likely bottom and return to it's price within the next few days

That's because many consider the earnings news already is priced into the stock. That, and along with some taking profits off the table ahead of earnings and any potential "bad news" or decrease in the outlook for 2018, will get the stock to go red ahead of earnings.

May see a bounce AH once the numbers are released, but then the news might sell. Still a good longterm option imho

Agreed. Memory is still in shortage and they are selling everything they make right now. All is well in semiconductor

So if i wanted to make a quick buck and get out of this thing but pick up the 2-3% gain... what is the best way to do it? Set it up to sell at opening or ride this thing for a few hours tomorrow and see what happens?

ETFs and big money tied into algorithms pretty much run the market. If it is a company that you believe in and it has good financials, then invest in it. The market will eventually come around.

It's up 4.3% post-market.

I've jumped into soxl, semiconductor market took a back seat in the last sector rotation so I feel there's money to be made here. It's leveraged so be careful, soxx is preferred for those with less risk

Brought AMAT and AMD up with it

I'm going to prob take a look at TSM. Took a similar drop in the last month but should move in a similar fashion.

Check out LRCX (Lam Research) too.

MU has been the biggest winner in my portfolio. Bought it in Feb 2016 at $11.45 and it has almost quadrupled.

MU transcript pointed at server business as expected sector to have most growth in 2018-19. This is probably why AMD took a jump after mu earnings.

Regardless semiconductor near future looks awesome.

So MU doesn't always follow expectations but here is what was presented at earnings
Act $2.45 vs est $2.22 (is their Q1)
Q2 guidance was like $2.51-$2.65 vs est of 2.02
Business discussion. Sees 2018 as growing. Cost decreases will be greater than selling price decreases. All segments performing thus reducing cyclical risk.

These were the 3 things I wanted. Thought it would pop. But continues to languish around $44 after the tech sell-off. I actually added more shares.

So why not moving? That is what the Longs want to know. Tech did not win in the tax law. Did not lose, just didn't win. Continues to be some movement out of tech.

Options: Heavy options on MU. Last qtr earned $2 and now earned $2.45 (also MU continues to beat their own guidance each qtr - but past performance is no guarantee of future performance). Last 4 qtrs earnings were .90, 1.62, 2.02, and 2.45. So most saw growth happening and $7 eps so just over 6 PE and see forward EPS of $10+ so a 4PE. Many of the options were placed when MU was in the 30's and placed for Dec and Jan expiration. Max pain is around 43. And guess what, that is right around where the stock ended. Could there be manipulation, maybe. This is one reason.

Reason 2. Business is very cyclical. We are at highs for memory chip for DRAM and NAND. Now business should rock and grow and supply is catching up. There are really 3 that participate. Samsung, SK Hynix, and MU. Samsung is the king. At this point no new fabs are being produced. So prices should come down, just not materially like in the past. Worry is that they will. One analyst has claimed normalized earnings are $4.90. Because of cyclical nature it only places a 10x on it, thus around 50. Most analysts are now around 55-60.

I think the new CEO is turning MU around to not be as cyclical. MU has quite a bit of debt, but should be debt neutral sometime in Q3. Capital expenditures continue to be high to stay in front of tech. I think new normalized earnings are around $7.50 and at 10x is 75. But if the big boys don't play along, well you know what happens...the price won't get there.

So I want to see what happens in the first couple weeks of Jan, what happens after Jan option date and what happens after Q2 release and guidance. The stock moves around. It also has a high option premium that allows you to buy and sell calls against thus lowering your basis if you are inclined to do options.

Anyways, those are my thoughts on it for now.

Ranger222 said:

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That's because many consider the earnings news already is priced into the stock. That, and along with some taking profits off the table ahead of earnings and any potential "bad news" or decrease in the outlook for 2018, will get the stock to go red ahead of earnings.

May see a bounce AH once the numbers are released, but then the news might sell. Still a good longterm option imho

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Earnings were released on Dec 19 for Q1 2019. They are on a weird calendar.

Honestly I do feel that cryptocurrency is moving much of the tech industry. A lot of MU sales are to gpu manufacturers, AMD and Nvidia. It most definitely shouldn't depend on that but the market is moving with it..

Kinda wish that crypto would quit impacting the regular market so much.

Frisco,

As I said to you in an another thread, thanks for your perspective on MU. My wife inherited an IRA from her mother, who passed away at the end of the summer. Those funds finally came available, and I opted to move them from a CD paying less than 1% into technology stocks. Thus far I've invested about half the proceeds into AAPL, NVDA, and MU.

Don't check your portfolio today

tailgatetimer10 said:

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Honestly I do feel that cryptocurrency is moving much of the tech industry. A lot of MU sales are to gpu manufacturers, AMD and Nvidia. It most definitely shouldn't depend on that but the market is moving with it..

Kinda wish that crypto would quit impacting the regular market so much.

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MU is NOT a crypto play, way more diverse and getting more diverse within the multiple of industries. That is part of the strategy to limit/reduce/mitigate cyclical risk. Instead of producing basic product they are producing value-add that help to limit competition and keep pricing higher.

Last Qtr (ended 11-30): From conference call slides:
Compute & Networking $3.2B (rev more than doubled YoY)Includes memory products sold into compute, networking, graphics, and cloud server markets.

Storage Business $1.38B (up 61% YoY)

Mobile Business $1.37B (+32% YoY)

Embedded Business $830M (+44% YoY)

Guidance is to do over 7B revenue and 2.65 eps in Q2 ends February 2018. Has had a nice rise to the new year after Nanya sold out of their shares. Purchased a company from them for stock shares. They have been selling like crazy as they needed the cash. Sold 8M shares the last couple days of the year after averaging bw 500k and 1M shares daily. Note avg daily volume is 35-40M shares. Increase has been from 41ish to almost 47 in 3 days.

From 10k:
For 2017, 20% of our net sales were to the compute and graphics market (including desktop PCs, notebooks, and workstations); 20% were to mobile; 20% were to SSD and other storage; 15%were to automotive, industrial, medical, and other embedded; and 15% were to server.

Sales to Intel, including Non-Trade sales through IMFT, as a percentage of total net sales, were 9%, 14%, and 8% for 2017, 2016, and 2015, respectively. No other customer exceeded 10% of our total net sales for 2017, 2016, or 2015.

As you can see the sales were not predominantly crypto. Auto is growing significantly as well as other industries as more and more storage/computing is required. In fact NVDIA and AMD are not the major customers.

I am not claiming it to be a crypto play.. was simply saying that as of late some tech has been moving with it, which it really shouldn't.

tailgatetimer10 said:

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I am not claiming it to be a crypto play.. was simply saying that as of late some tech has been moving with it, which it really shouldn't.

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gotcha, I think $MU is moving for much different reasons although there could be some uplift from what you say. Time will tell. My TXN if moving nicely. I got out of INTC upon info the chip issue. But may get back in depending on earnings conference call.

I actually bought it the day after the news broke for a swing trade. I'll sell Monday for hopefully a 3 percent gain

Looks like the stock may be breaking out today and heading towards 52 week highs. Race to $60 on?

You never know with $MU, it is played with quite a bit. Still undervalued IMO

Guidance for Q2 ending Feb was $2.65 as noted in an above note. A couple weeks ago they pre-announced guidance (I think because it was being taken down lower and lower) and it was $2.71-$2.75, so Q2 will beat expectations and be in line for an $11.00 year and only trading at $46.50, so still near a 4 PE....yep not a typo, a 4 PE. Will be looking to see what guidance is. If $MU continues to show Q over Q increase and is anywhere $2.85 and above will be outstanding. Find out on March 22, I believe.

MU busting through 52wk highs, now at 50.70 up over 3% today.

Frisco...

What's driving this? Thanks in advance.

Toddy, good question.

$MU trades heavily and has increased its volume. It gets moved around a lot and by that it can easily move up or down 10% in a few days. Overall its trend has been up. I was getting into it at $28 and they just keep posting incredible earnings. You can read above.

Its get played with though as many still believe chips are just a pure commodity play, and one that was suppose to top out in late 17 or early 18. What has happened is that the companies in the market including the equipment suppliers continue to be very optimistic and thus most of the cycle talk as pushed to the end of 19 or early 20.

Regarding a commodity. MU chips are used in many specialized industries. You should read the 10k. I debunked earlier in the thread the notion that MU is a crypto play. It most certainly is not. But MU will have some commodity type exposure it continues to be less and less as chips get more specialized and as they enter new industries that require a more specialized chip.

I think guidance on March 22 (actual earnings announcement although they pre-announced) will be crucial. If we continue to see incremental earnings then MU can get to $12.00 annual earnings with a stock price of $52 ish. Wow! Incredible growth with a low PE. The company should be debt neutral soon too which could allow for a ratings increase.

Note they are #3 behind Samsung, big daddy, and SK Hynix, older brother. But memory is driving big profits for all 3 so I don't expect either to flood the market to take market share.

Because of the volatility, MU has been a traders dream. It has large premium on the options if you play any of that. I do sell some covered calls, but I have withheld doing so during this quick run up. I may do so soon since I have a core position and a trading position with MU. I like AMAT and LRCX as well, but MU is clearly my big position with 8,800 shares.

MU is volatile, so I would look for pullbacks to get in if interested in beginning a position. If I was just trading, I might get in now and sell covered calls. If it goes down then buy the calls back and wait for it to move up again and do it again. Anyways do your due diligence. Read the K's and Q's. I like it, but it certainly has some risks to it.

When to sell? I'm thinking today at $55, if it gets there.

This is my alltime best dumb luck pick.

Not sure why you would sell now or how it was dumb luck. It is still undervalued.

I bought it for $44 around Christmas time. Based on what I've read, I believe this stock has a great deal of upside. I will continue to hold until I see some changes in their fundamentals.

Not sure I would sell trading shares right now until $60

HECUBUS said:

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When to sell? I'm thinking today at $55, if it gets there.

This is my alltime best dumb luck pick.

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I am holding my shares. But depending at what price you got in, I could see you taking 25% or 50% of your shares off. Question is, what is your next dumb luck pick? I like LRCX and AMAT, maybe BABA.

The air leasing stocks have been battered lately (AL and AYR). Have to think they are near a bottom.

On MU again, remember they announce on 3-22 (already pre-announced) so the story is on guidance here not earnings as they easily beat analysts expectations pre announcement.

Good luck.

Limit order at 55.57 executed yesterday AM. Yay. Real profits. Officially my best dumb luck pick.

I posted a link here about 3D-Xpooint a while back. It peaked at $20 on that news and dropped to $10 soon after. Turns out it was NAND demand. I haven't heard anything about 3D-Xpoint.

Maybe I'll get back in later. Good luck indeed.

HECUBUS said:

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Limit order at 55.57 executed yesterday AM. Yay. Real profits. Officially my best dumb luck pick.

I posted a link here about 3D-Xpooint a while back. It peaked at $20 on that news and dropped to $10 soon after. Turns out it was NAND demand. I haven't heard anything about 3D-Xpoint.

Maybe I'll get back in later. Good luck indeed.

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In the Dec call they said they would discuss 3DXP in the May conference. In the meantime we have earnings on Mar 22