Micron Technology, Inc. (MU) & More: These Stocks Beat the Market in Q1 and Could Climb Higher

The markets have been off to a great start in 2013, with the S&P 500 (INDEXSP:.INX) gaining close to 12% in the first three months of the calendar year. Who would have thought that this was possible as 2012 drew to a close, with last minute wrangling over the fiscal cliff deal and the sticky situation in Europe? However, the stock market has rallied strongly, and those who had their money invested in the right stocks must be sitting on a pile of profit.

I was one of those many bloggers who picked stocks for the New Year, in an effort to guide readers to the best possible ways of utilizing their hard-earned dollars by investing in the right stocks. With one quarter of the calendar year and an earnings season in the rearview mirror, I think it’s the right time to see how my picks performed during the period.

Company Expectation 1Q Returns
Micron Technology (NASDAQ:MU) Will Appreciate 62.71%
Ciena Will Appreciate 4.44%
Cree (NASDAQ:CREE) Will Appreciate 64.79%
Giant Interactive (NYSE:GA) Will Appreciate 20.82%
Finisar Will Appreciate -16%
JDS Uniphase Will Appreciate 1.56%
Family Dollar Stores Won’t Appreciate -5.82%
ADTRAN Won’t Appreciate 1.55%
Xilinx Will Appreciate 8.09%

Stock price data (from Dec. 31, 2012 to March, 28, 2013) taken from Google Finance

Thus, I was mostly on the spot with my picks, with the likes of Micron Technology, Inc. (NASDAQ:MU) and Cree outperforming my own expectations. But the relevant question now is — where are these stocks headed from here? I will look at the top three performing picks of mine in this post, and see if they can sustain their momentum, while the rest of the stocks will be covered in a later post.

Micron Technology, Inc. (NASDAQ:MU)

Micron is poised to spike

Towards the end of 2012, I had advised investors to hang on to their long positions in Micron, and what a terrific recommendation it turned out to be. Micron’s ascent began as signs of a rebound in the pricing of NAND and DRAM chips started appearing. The company’s latest quarterly report established the fact that it is indeed witnessing an improvement in the average selling prices of its memory chips. What’s more, the company is expecting a solid demand environment to complement improved pricing.

Micron Technology, Inc. (NASDAQ:MU) expects its mobile DRAM business to grow further, driven by the presence of two heavyweight smartphone makers on its client list, according to its President, Mark Adams. Ever increasing sales of mobile devices are expected to push demand for NAND flash higher. Moreover, Micron’s solid-state drive (SSD) business is expected to continue growing after jumping 40% in the previous quarter.

In addition, DRAM shipments for networking got off to a strong start. With the expected increase in telecom spending, led by the likes of AT&T Inc. (NYSE:T), Micron Technology, Inc. (NASDAQ:MU) is expecting is expecting its DRAM bit shipments to the networking sector improve further. Also, once Micron completes the acquisition of Elpida, it would have a better command over the DRAM and mobile DRAM market. All in all, things seem to be looking up for Micron and I don’t see any reason why it shouldn’t continue its ascent.

Cree lights up once again

Light-emitting diode (LED) maker Cree is one stock which has defied gravity in the true sense of the word. The stock had met with downgrades toward the end of last year, analysts were citing a high trailing P/E and growing competition as the reasons why Cree shares could drop. But I was pretty sure that the company would continue its trailblazing run in 2013, and it has done so quite handsomely as evident from the chart above.

Going forward, I don’t expect Cree to slow down. The company has successfully negotiated the threat of bigger peers such as Koninklijke Philips Electronics NV (ADR) (NYSE:PHG) and General Electric Company (NYSE:GE) so far as it is a pure-play LED company. Its focus on delivering great products at low cost has seen it win a number of lighting contracts across the globe. Moreover, the rapid growth in the LED lighting industry makes Cree a growth stock which investors should consider despite a high P/E ratio.

Cree shares received another boost last month after the company bumped up its guidance and introduced “game-changing” replacement bulbs which would spur adoption of LEDs. Its 40-watt replacement bulb for $9.97 could go a long way in driving its top line higher as it consumes 84% less energy and lasts 25 times longer. The company is set to report its next quarterly results later this month, and I won’t be surprised if its streak of solid performances continues.

Game on with this Giant

Chinese online gaming company Giant Interactive is one pick of mine of which I’m really proud. I’ve followed the company for almost a year now, and find it to be the best bet to ride the growth of online gaming in China. This is why I had expected it to turn in a giant performance this year, and it hasn’t disappointed me at all.

Giant has been growing its revenue and earnings at a fantastic pace, driven by the success of its games. The company has witnessed solid and consistent growth in its active paying accounts and average revenue per user, with both metrics improving 6.1% and 7.4% in the previous quarter, respectively. Giant has constantly improved its games and developed interesting new ones which have done well.

Its wide portfolio of games, coupled with growth across different platforms, including web games, micro-client games, and mobile, position it well to benefit from the proliferation of gaming in all forms. The company always has at least one great game in its portfolio to drive growth. While the ZT Online franchise has helped it rake in solid revenue quarter after quarter, new games such as World of Xianxia are expected to lift the top line to new highs.

The best part about Giant is that the company still trades at a cheap trailing P/E of 10 even after appreciating close to 25% so far this year. With more growth in the offing, Giant investors can expect the stock to rise further.

Final thoughts

These three stocks have done really well in the first quarter of 2013, and the strength of their businesses can take them even higher. While improved pricing trends and solid demand are tailwinds for Micron Technology, Inc. (NASDAQ:MU), rapid adoption and innovation should do the trick for Cree, and Giant’s addictive games and growth across different platforms can propel it to new highs.

As mentioned earlier, I focused on my best picks in this post. But we shouldn’t forget the laggards either, as they can always turn into leaders. Check back again in a few days to see if the laggards in my list can transform into leaders.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Giant Interactive Group.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!