MU - Playing Catchup with NVDA
In 2020 eyes have been on NVDA when it comes to processing power while MU lagged in performance. This raises the question whether 2021 the stock will be able to catch up.
The Moetley Fool (MTFL) has published an interesting read on this (fool.com/investing/2021/01/29/better-2021-buy-nvidia-or-micron-technology/). Fundamentally MU trades at a significant discount from a value perspective and overall analyst consensus is rather bullish with a $98 price tag.
From a thematic perspective I believe both, MU and NVDA, have a good reason to part of a diversified portfolio. Despite many similarities the companies have some key differentiators. While NVDA is mainly a GPU play, MU is a key-player in the RAM space.
Some key fundamentals on MU (vs. NVDA);
- P/E ratio 19.57 (51.18)
- PtS 3.81 (21.64)
- Book Value per share 35.73 (24.77)
- RoE 7.85% (28.82%)
- Profit Margin 12.61% (25.89%
- Int. Cov. 28.19 (88.6)
- FCF 11.84% (25.6%)
Personally I seek to add MU around current levels as I believe there is good upside in the medium term and there is a definitely potential room for higher valuations.
For the entry I turn to technicals;
- The stock has sold of it's all time high ($87) and currently sits around the 50% Fib Retracement around $78
- A pennant is forming which is usually a bullish sign
- Stock is trying to breach the $80 gap formed in the recent market selloff on Wed.
- MACD is still bullish although it seems to loose some steam starting to form a short term crossover
- RSI is around 50 (neutral)
My trade:
- Aiming to buy around $80 levels to ensure the gap is closed.
- SL around $70 (just below 78% Fib Retracement that indicates support)
- TP in line with Analyst Est. around $98
As usual my SL will be dynamic to the upside to protect profits.
***This is my personal view and does not represent investment advice. Risk management is key, do not trade what you cant afford to loose.***
The Moetley Fool (MTFL) has published an interesting read on this (fool.com/investing/2021/01/29/better-2021-buy-nvidia-or-micron-technology/). Fundamentally MU trades at a significant discount from a value perspective and overall analyst consensus is rather bullish with a $98 price tag.
From a thematic perspective I believe both, MU and NVDA, have a good reason to part of a diversified portfolio. Despite many similarities the companies have some key differentiators. While NVDA is mainly a GPU play, MU is a key-player in the RAM space.
Some key fundamentals on MU (vs. NVDA);
- P/E ratio 19.57 (51.18)
- PtS 3.81 (21.64)
- Book Value per share 35.73 (24.77)
- RoE 7.85% (28.82%)
- Profit Margin 12.61% (25.89%
- Int. Cov. 28.19 (88.6)
- FCF 11.84% (25.6%)
Personally I seek to add MU around current levels as I believe there is good upside in the medium term and there is a definitely potential room for higher valuations.
For the entry I turn to technicals;
- The stock has sold of it's all time high ($87) and currently sits around the 50% Fib Retracement around $78
- A pennant is forming which is usually a bullish sign
- Stock is trying to breach the $80 gap formed in the recent market selloff on Wed.
- MACD is still bullish although it seems to loose some steam starting to form a short term crossover
- RSI is around 50 (neutral)
My trade:
- Aiming to buy around $80 levels to ensure the gap is closed.
- SL around $70 (just below 78% Fib Retracement that indicates support)
- TP in line with Analyst Est. around $98
As usual my SL will be dynamic to the upside to protect profits.
***This is my personal view and does not represent investment advice. Risk management is key, do not trade what you cant afford to loose.***
ملاحظة
Stock running nicely building a new high before slightly pulling back over the past two trading days. Seeing if $85/86 forms new support level for next move higher into the $90's
Remaining bullish in the medium to long run but moving up SL level to $80 to protect initial investment in case of mean reversal.
ملاحظة
Chart update:ملاحظة
Maintaining position despite recent volatility. Uptrend still intact. Upping SL to $80 which is my entry level to protect against negative surprises.
إخلاء المسؤولية
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