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Anatomy of Success: Micron (MU)

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Discovering which stocks are best positioned to see their price increase is surely a daunting task, but by utilizing a tool like the Zacks Rank, it becomes much easier, and much more profitable.

Stocks with a #1 (Strong Buy) ranking have a long history of outperforming the markets over a one-to-three-month time period, and it’s important to note that only 5% of the Zacks Rank universe receives this unique grade. Not only does this ranking system help identify the most elite companies, but it also enables people to hold a certain security while it continues to gain in value beyond the three-month investment horizon.

Below, we highlight a stock that has evolved into a strong player in the broad semiconductor industry, and by following our ranking system, investors could have realized major gains.

Micron Technology (MU - Free Report)

Headquartered in Boise, ID, Micron is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking, and mobile products.

MU was first added to the Zacks Rank #1 (Strong Buy) list after it reported its fiscal 2018 first quarter results. Earnings of $2.45 per share topped the Zacks Consensus of $2.23 per share, while revenues of $6.8 billion surged 71% year-over-year. Overall strong performance was driven by double-digit sequential revenue growth in mobile, server and SSD applications. At the closing bell on December 22, shares of the tech company closed at $44.12.

The company kept up this Strong Buy run for about three months and was given the #1 title once again in late March due to a strong second quarter performance. Both earnings and revenues beat the Zacks Consensus and improved in comparison to the prior year quarter. Net sales were up 58% year-over-year and reflected increased broad demand across our products and end markets. About four months after first hitting the top of the Zacks Rank, MU closed up 33.5% to $58.92 per share.

MU was added to the Strong Buy list a third time at the end of May after impressive fiscal 2018 third quarter results. Both the top and bottom line beat the Zacks Consensus, and total revenues were up 40% year-over-year. The company set new records for revenue in SSDs, Mobile Managed NAND and Automotive solutions along with Cloud/Enterprise and Graphics DRAM Memory. Six months after its first Strong Buy listing, MU shares have increased nearly 40% to $61.35. MU is still a #1 (Strong Buy) on the Zacks Rank, and shares have risen over 90% in the past one-year period.

This table shows the price performance of MU (in red), as well as the 12-month forward looking EPS estimate (in green) from the time the stock first earned a Zacks Rank #1 (Strong Buy). During this stretch, MU never moved lower than a Zacks Rank #3 (Hold).

By utilizing the Zacks Rank, investors are able to easily identify elite stocks that are best positioned to beat the market on a consistent basis, and how to hold those top stocks as they continue to grow.

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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

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