Micron Stock Analysis - Is Micron Stock A Buy?

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Memory Chip Market
There are only 3 major players in the DRAM space of which Micron has about a 28% market share, the other companies are Samsung and SK Hynix.
Now the cool thing about having only a couple of competitors, means that each company has been able to enjoy pretty high margins and good ROE - which I’ll get to later in the finances.
Also, recently, Micron has been gaining market share on both of these rivals.

Memory Chips are Cyclical

The reason it is trending upwards is because memory chips are vital to the future of AI, 5G and the gaming industry. We will see exponential growth in these areas and memory and storage is going to be part of that.

Guru Investors

One of my favorite investors is Mohnish Pobrai. He is the manager of the Dalal Street Fund in the US, and the more international Pabrai investment Fund. He is a deep value investor and I have a lot of respect for him and how he analyses and makes investments.

So when I see a company that he has invested in, I take notice. And that is exactly why we are looking at Micron Technology.
He currently only has 2 investments in the US. Micron and Seritage Growth Properties, with Micron being the largest part.
I know how thorough Mohnish Pabrai is when making an investment, so for him to make such a big play into Micron, is a big tick of approval.
I think there is nothing wrong with copying the great investors. They have far more experience than most of us and made far more money than most of us as well.

Another superstar investor that I like to follow is Li Lu.
Li Lu is actually who Charlie Munger, of Berkshire Hathaway, entrusts with a large amount of his family's net worth.
Li Lu runs the Himalaya Capital Fund and here is the latest 13F.
As you can see, Micron makes up about half of the portfolio.
With Bank of America, Facebook and Google the other parts of the portfolio.
Li Lu was also invested in Alibaba but has sold out of the position.

So this gives me a lot of confidence about my own portfolio and what I am doing, because I literally own all of these companies except for Micron.
So both Mohnish Pabrai and Li Lu, two of my favorite investors, are heavily invested in Micron.

BuyBacks
Share buybacks is something I really like to see.
In 2018, Micron started buying back shares. Now although this has been inconsistent, it is a good sign that the company wants to return value to shareholders. So another positive for Micron.

Intrinsic Value (Fair Value)
To get a copy of the calculator that will help you find Intrinsic value, I have a link in the description and it’s free if you want it.
When I say Intrinsic Value, what I am talking about, is based on the growth rate of the company, and how much money the company makes, Intrinsic value is the correct share price. It’s not perfect because we make assumptions of the growth rates, but it helps get us a ballpark figure.
But the stock market often overvalues or undervalues companies, so this one good approach to working out value.

You can go through the 13F and estimate what average price the Guru investors bought in at. It looks like Mohnish Pabrai bought in at about $36-$38 and Li Lu at about $40-$42.

So do I want to invest in Micron?

Thanks for staying to the end of the video. Let me know what you think of Micron, I’m interested to hear opinions, hit subscribe so you don’t miss my future video’s and I’ll see you next time.