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3 Reasons to Buy Micron Technology Today

Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. And though memory maker Micron Technology (Nasdaq: MU  ) has already seen its stock recover from the recession, many investors expect even better times ahead.

In our Motley Fool CAPS community, 87% of the 876 investors rating the company are bullish, so there's no shortage of reasons why Micron will thrive, three of which I've highlighted below.

But here at the Motley Fool, we're all for looking at both the good and bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below, or rate Micron yourself in CAPS.

1. Earnings momentum
Many bullish CAPS members have latched on to the positive earnings momentum Micron has shown in recent quarters. It put up monster-sized sales and earnings growth numbers in its fiscal third quarter, while companies it's working with around the tech sector such as Intel (Nasdaq: INTC  ) , STEC (Nasdaq: STEC  ) , and Marvell Technology (Nasdaq: MRVL  ) generated strong quarterly results as well. With the widespread strength in demand for technology products -- both industrial and consumer -- a good portion of investors look for Micron's good fortune to continue. 

2. Cheap shares
With an earnings multiple in the single digits and an estimated five-year growth rate of more than 11%, Micron's PEG ratio sits below that of peers like Rambus (Nasdaq: RMBS  ) and SanDisk (Nasdaq: SNDK  ) . Some CAPS members can't pass up the bargain they see in Micron's shares while the company is booking profits and looking at a future that includes significant growth.

3. Industry strength
The global semiconductor market has been on fire, prompting the world's largest contract chip maker Taiwan Semiconductor (NYSE: TSM  ) to boost capacity, and leading research firm iSuppli to raise its 2010 global semiconductor market revenue growth forecast to 35%. iSuppli also sees particular strength in memory chip demand, which is Micron's bread and butter, leaving many investors thinking that all this spells good news for Micron's shares.

To see details of what CAPS members are saying now about Micron, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts directly to this story in the comments box below.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 62 points on average, take a free 30-day trial.

Fool contributor Dave Mock thinks three fish tacos is the perfect lunch combo. He owns shares of Intel, which is an Inside Value pick. The Fool owns shares of and has written puts on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool's disclosure policy is a little sensitive about its birthmark.

Read/Post Comments (1) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 24, 2010, at 4:17 PM, geneccs00 wrote:

    New products (iPad and tablets, SSDs) plus PC refresh cycle will add to the middle class demand that is now worldwide for products with memory components. The dragging out of the recession will lengthen this effect and MU should be able to innovate lower cost into their chips while pent up demand holds prices at elevated levels.

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