Micron Technology, Inc. (MU): This Tech Stock Is Poised to Move Higher

Compared to Micron, ARM Holdings plc (ADR) (NASDAQ:ARMH) has a much less hedge fund interest, with only 16 hedge funds owning the stock at the end of 2012 compared to Micron’s 31.

NVIDIA Corporation (NASDAQ:NVDA) is a major chip maker for PCs, competing with the likes of Intel Corporation (NASDAQ:INTC) and AMD. Nvidia and these other companies have seen significant pressure due to a slowdown in the PC market. Nvidia’s PC-based graphics card has been under the most pressure, where the company gets close to 34% of revenue from GPU (desktops and notebooks).

By the numbers

Micron Technology, Inc. (NASDAQ:MU) remains relatively cheap, trading at only 13 times forward earnings, while Applied Materials is also at 13 times, Analog 17 times, ARM 27 times, and NVIDIA Corporation (NASDAQ:NVDA) 15 times. Micron also has an impressive future expected growth, with analysts expecting EPS to grow at an annualized 13% over the next five years, which is higher than any of the company’s peers listed, except ARM. ARM Holdings plc (ADR) (NASDAQ:ARMH) is expected to grow EPS 22%, but its high valuation limits the attractiveness of this expected high growth. 

Micron Technology, Inc. (NASDAQ:MU) pays no dividend, unlike some of its major semi-conductor peers. Applied Materials, Inc. (NASDAQ:AMAT) pays a 3% dividend yield, Analog 3%, and NVIDIA Corporation (NASDAQ:NVDA) 2.4%. However, this is not necessarily a negative, as the company is putting the cash saved from not paying a dividend to work.

Don’t be fooled

Micron Technology, Inc. (NASDAQ:MU) has one of the best growth profiles in the industry. Couple this with its relatively cheap valuation and the stock can easily add to its already robust share price movement. The current consensus average price target on the company is higher than $11, and Sanford Bernstein also recently upped its price target on Micron to $13 per share, which represents a 40% upside from current levels.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.