3 Reasons to Sell Micron Technology Today

Acting on panic never helps investors, but it's still a good idea to question why you're really buying individual investments.

Consider chip maker Micron Technology (Nasdaq: MU  ) . Though the semiconductor sector continues to soar, you'll find a few of the 876 Motley Fool CAPS members weighing in on the company offer reasons to be bearish.

Here at the Motley Fool, we like to consider both the good and bad sides of an investment, so in this article, so I'm highlighting three of the main bearish arguments on Micron today. Be sure to read the bullish side as well, and then weigh in with your own comments below or rate Micron in CAPS.                                           

1. Weakening chip market?
Even though the semiconductor market has been hot recently with big quarterly sales numbers being reported by companies such as chip manufacturing equipment maker Applied Materials (Nasdaq: AMAT  ) and others such as Broadcom (Nasdaq: BRCM  ) and SanDisk (Nasdaq: SNDK  ) , investors are more concerned with where the market may be headed going forward. Weak consumer confidence, anemic job growth, and overall economic weakness are all reasons the Semiconductor Industry Association recently gave for why it expects the industry to retreat going forward, which is keeping some CAPS members cautious.                    

2. Slowing PC sales
Wall Street analysts have been warning of falling PC sales lately, leading to pressure in stocks along the PC supply chain such as Intel (Nasdaq: INTC  ) , AMD (NYSE: AMD  ) , and Micron. One Baird analyst recently downgraded several semiconductor companies, including Micron and Texas Instruments (NYSE: TXN  ) , citing signs of slower corporate spending in the second half of the year. As PCs make up a significant portion of the memory market, the potential for decreasing demand here has some investors questioning their positions.   

3. Uncertainty looming
Micron's management further fanned investors' worries during its latest earnings conference call with its unenthusiastic outlook for DRAM production for the current quarter, leaving some investors guessing as to the strength of future earnings. With potentially slowing production growth taken together with the possibility of weakening prices, investors are keeping a close watch on things going forward.            

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 votes three to be the number of the day. He owns shares of Intel, which is an Inside Value recommendation. 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 multicultural and loves to try new food.


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  • Report this Comment On August 23, 2010, at 2:47 PM, russfischer1013 wrote:

    1. iSuppli just raised their semiconductor estimate for 2010.

    2. slowing PC sales in not born out by the recent earnings announcements of Dell and HP. In any case Micron is only part DRAM, the othe part is NAND and NOR Flash memory which is growing like a week into smart phones, iPods and other consumer products.

    3. The CEO has been on a tour recently with a presentation that would seem to tell of a major change to a cash generator from a cash consumer for Micron.

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