This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Micron Mashes the Accelerator

Stocks in this article: MU BRCM AMAT SNDK SSNLF

NEW YORK ( TheStreet) -- Investors who are still unsettled about the state of the semiconductor industry have every cause to kick themselves for having missed out on Micron's (MU) impressive 240% gains in 2013.

While fears about high-end device saturation and weakening average selling prices (ASP) were valid reason to avoid companies like Broadcom (BRCM), the situation, however, has been entirely different for Micron, which operates within the memory chip space. And as with Applied Materials (AMAT) and SanDisk (SNDK), this entire subset continues to enjoy above-average economic returns.

As I've said recently, while I've been a firm believer in Micron's turnaround potential, particularly due to its strategic shift to higher growth markets like network enterprise, I do wonder how long this resurgence can continue. Not just with Micron, but for the entire industry.

Upon Wednesday's release of first-quarter earnings, management did its best convening job yet (even with the stock being up close to 250% from its 52-week low). Analysts were looking for 44 cents in earnings per share on revenue of $3.7 billion, which would represent year-over-year revenue growth of 103%. That's not a typo. Essentially the Street was looking for confirmation that Micron deserved its 2013 gains.

With first quarter EPS and revenue surging 165% and 120%, respectively, Micron management answered the call with authority. Equally, and perhaps more impressive than the 69% year-over-year jump in DRAM revenue, was the 7% sequential improvement in gross margin, which registered at 32%. This tells me that management has, in fact, begun to extract value from the Elipida acquisition.

This once unpredictable industry, now consolidated to four major suppliers, is starting to reveal that long-term profitability is indeed realistic. And with Micron growing earnings and cash flow at astronomical levels, if there were any doubts that the company can maintain its momentum against a surging Samsung (SSNLF), this, too, was put to rest with management raising guidance.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs