The light at the end of the tunnel isn't always an oncoming bullet train. Sometimes it's simply daylight at the end of a long, dark night.
Computer memory maker Micron Technology
Micron reported much stronger memory sales in the fourth quarter than the third, whether you're looking at unit volumes or dollar sales. Average selling prices actually increased for once, and management talked about improving markets and increased demand.
That still wasn't good enough to pull Micron out of the red ink. Micron reported a net loss of $88 million or $0.10 per share, and the full-year net loss added up to $1.8 billion. But Micron runs a capital-intensive business, and $2.1 billion of that annual loss came from depreciation and amortization of those expensive manufacturing facilities. Micron doesn't use third-party manufacturing specialists like United Microelectronics
When you back out those massive infrastructure costs from years past, Micron is doing surprisingly well. Operating cash flow stopped at $357 million in the fourth quarter and $1.2 billion for the full year. And because the memory industry at large is trying to stem the tide of huge oversupplies, current capital expenses are small and free cash is flowing in healthy amounts.
I think it's safe to say that the memory sector is a safe place to invest again. Unfortunately, market consolidation and a few bankruptcies have left us with precious few stocks to choose from. Micron and SanDisk
Micron's stock price has tripled in 2009, and SanDisk’s has doubled. Is it too late to jump aboard the memory bandwagon, or will this stock bounce higher still? Discuss in the comments below.
Fool contributor Anders Bylund owns shares in Taiwan Semiconductor, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like. Intel is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool is investors writing for investors.