This Buy-Rated Semiconductor is Worth a Look Today

NEW YORK (TheStreet) -- Micron Technology (MU) continues to add to 2013 gains, proving it's one of the top performing semiconductor stocks. By midday, Micron had gained 3.5% to $23.09, as 27.7 million shares had changed hands. The company was the most actively-traded stock on the Nasdaq, exceeding Facebook (FB) and Plug Power (PLUG) by more than 10 million in volume.

The stock surged towards the end of November after Greenlight Capital hedge fund manager David Einhorn revealed he was long.

"You look at the multiples and what their earnings power here can be, we think [Micron's] earnings are going to be a lot better than people think. Next year, maybe $3.50 a share, the following year maybe $4 a share," Einhorn told CNBC in an interview last month.

Year to date, shares of the Boise, Idaho-based Micron surged 264.7%, topping the Merril Lynch Semiconductors Holders (SMH) ETF, which is up 38.48% since January.

TheStreet Ratings team rates Micron Technology Inc as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate Micron Technology Inc (MU) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 44.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 729.16% and other important driving factors, this stock has surged by 250.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Micron Technology Inc reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Micron Technology Inc turned its bottom line around by earning $1 a share vs. -$1.04 a share in the prior year. This year, the market expects an improvement in earnings ($2.14 vs. $1).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 802.9% when compared to the same quarter one year prior, rising from -$243 million to $1,708 million.
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