Trade-Ideas LLC identified

Micron Technology

(

MU

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Micron Technology as such a stock due to the following factors:

  • MU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $382.6 million.
  • MU has traded 18.5 million shares today.
  • MU is down 3.1% today.
  • MU was up 5.4% yesterday.

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More details on MU:

Micron Technology, Inc. provides semiconductor systems worldwide. It operates in four segments: Compute and Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit. MU has a PE ratio of 44. Currently there are 13 analysts that rate Micron Technology a buy, 3 analysts rate it a sell, and 6 rate it a hold.

The average volume for Micron Technology has been 29.7 million shares per day over the past 30 days. Micron Technology has a market cap of $14.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.87 and a short float of 6.5% with 2.58 days to cover. Shares are up 3.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Micron Technology as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • MU's debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MU's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.57 is high and demonstrates strong liquidity.
  • 43.24% is the gross profit margin for MICRON TECHNOLOGY INC which we consider to be strong. Regardless of MU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MU's net profit margin of -7.41% significantly underperformed when compared to the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MICRON TECHNOLOGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $389.00 million or 70.86% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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