3. Micron Technology, Inc. (NASDAQ:MU)
Platinum Asset Management’s Stake Value: $327,269,000
Percentage of Platinum Asset Management’s 13F Portfolio: 9.10%
Number of Hedge Fund Holders: 83
Micron Technology, Inc. (NASDAQ:MU) is headquartered in Boise, Idaho, operating as a manufacturer of memory and storage products that are distributed worldwide. The company designs dynamic random-access memory, flash memory, and USB flash drives. Securities filings for Q4 2021 reveal that Kerr Neilson’s fund owned 3.5 million shares of Micron Technology, Inc. (NASDAQ:MU), worth $327.2 million, representing 9.10% of the 13F holdings.
On March 29, Micron Technology, Inc. (NASDAQ:MU) reported earnings for the quarter ending February 2022. The company posted an EPS of $2.14, above consensus by $0.16. Revenue for the period grew about 25% from the prior-year quarter, reaching $7.79 billion, outperforming estimates by $241.85 million.
Mizuho analyst Vijay Rakesh raised the price target on Micron Technology, Inc. (NASDAQ:MU) on March 30 to $113 from $110 and reiterated a Buy rating on the shares following the “solid” February quarter results. The company reported quarter-over-quarter growth in storage and compute, as well as longer-term tailwinds from product mix and content increases, the analyst told investors. He believes that Micron Technology, Inc. (NASDAQ:MU) is positioned advantageously heading into 2022.
According to the fourth quarter database of Insider Monkey, 83 hedge funds were long Micron Technology, Inc. (NASDAQ:MU), up from 63 funds in the earlier quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a significant shareholder of the company, with 5.4 million shares worth $507.30 million.
Here is what Hazelton Capital Partners has to say about Micron Technology, Inc. (NASDAQ:MU) in its Q3 2021 investor letter:
“It’s hard to explain how shares of Micron Technology, manufacturer of DRAM and NAND semiconductor chips, can fall during a global chip shortage. In most industries, focusing on demand can give you a clear insight into what lays ahead for a company. Today, the memory and storage chip industry is no different. However, in the past, companies focused on market share led to the reckless build out of chip fabrication plants (FABs), oversupply, falling average selling prices (ASPs) of memory and storage chips, lower margins, and declining cash flows. As the industry consolidated – there are now just 3 major producers of DRAM and 5 on the NAND side – rational behavior among the key players began to take hold as competitors began focusing more on R&D. Currently, chip pricing remains cyclical although less so than in the past and that cyclicality has a long-term upward bias. The ongoing transition to newer and more robust platforms (3D 176-layer NAND & 1-Alpha node DRAM) has provided the memory and storage chip industry with improved supply capacity under its current manufacturing footprint, ultimately pressuring ASPs. Over the past three years, as most of the large platform conversions have already taken place, being able to add more bits per wafer has reached a saturation point. With no major FAB build outs planned in the near-term by competitors Samsung or SK Hynix, constrained supply and flattening cost curves should lead to durable and upward sloping ASPs once the recent volatility from the chip shortage subsides.
Currently Micron Technology trades at just 8x 2022 estimated earnings. MU is expecting growth in both DRAM and NAND not just from the supply of more chips to data centers, artificial intelligence, the auto sector, and mobile devices, but also from greater demand for gigabyte capacity per unit within those segments. With a healthy balance sheet, improving return on invested capital, and expanding cash flows, not only should Micron benefit from improving future earnings but its multiple should also reflect the transition to a flattening cost curve.”
