Based upon the fundamentals, MU is looking pretty strong. The last four quarters have shown really strong earnings increases. The revenues for those four quarters have been close to doubling.
Quite frankly, they are having an excellent year from a fundamental perspective.
Now, while the fundamentals look strong, the PE looks a little high at almost 10. With the cyclical nature of this business, I would say a 10 PE is a little high. Sure, it could go higher, but the downside risk in my mind is much higher than the possible upside gain.
Their chips are in high demand right now with artificial intelligence and machine learning foremost in people's minds. Would I buy it at this price? No, I wouldn't. While it may continue to surge ahead, I don't see enough upside potential to counterbalance downside risk. I would rather be safe than sorry at this point.
I own it in the low teens, so I have a good margin of safety. Even that margin of safety could shrink really quickly if the economy changes for the worse. This is one of those stocks in an industry where the potential success is highly tied to owning a company at a bargain price.
Like musical chairs, I don't want to be left without a seat when the music stops.
