The heterogeneous fool to take
Micron is a leading supplier of memory semiconductor chips and data storage technology. Its products are primarily used in personal computers, but it is experiencing a growing demand for chips for use in data centers, 5G-enabled devices, and even electric vehicles. Micron’s revenue grew 29% in fiscal 2021, and management expects record revenue in fiscal 2022.
The company is optimistic about the near-term outlook in the personal computer market, which is seeing good demand right now, with consumers buying more PCs per family. Additionally, there is growing demand from data centers for Micron products. Major cloud computing companies, such as Microsoft and Amazon, are spending billions of dollars on cloud infrastructure, and this is a long-term growth factor for Micron’s solid-state drives used in data servers. Sales of NAND, a type of non-volatile flash memory used in SSDs, accounted for 24% of Micron’s revenue in the last quarter.
Micron’s share price looked attractive, with a recent price-to-earnings ratio forecast of around 10; it also has a small dividend, which recently returned 0.22%. (Assuming the company performs well over the next few years, the dividend is likely to rise.) Analysts expect the company’s earnings to grow on average 24% annually over the next five years. It is a cyclical activity that can be volatile from year to year, but long-term investors are likely to profit.
Ask the Fool
From HF to Lancaster, Pennsylvania: What are the “complications” I see mentioned in some reseller reports?
The Fool replies: Sometimes referred to as “same-store sales,” comps (short for comparable or comparable in-store sales) are sales in stores that have been open for a year or more. Imagine that PieMart Inc. records $ 100 million in revenue in 2021 and $ 200 million in 2022. That sounds pretty awesome – 100% growth! But what if PieMart had 10 stores open in 2021 and 20 open in 2022? While same-store sales for 2022 were $ 100 million, sales in its stores that have been open for at least a year have remained unchanged, up 0%.
Retailers opening new stores are likely to see their total sales increase simply because of the new locations. Comps give you a more realistic, apple-to-apple view of how well the business is doing. Ideally, retailers will increase sales in existing stores while opening new ones. It’s a red flag if a retailer’s growth comes primarily from adding stores.
BN to South Bend, Ind .: What is a “full position” in an action?
The Fool replies: If you’re thinking you’d like to own $ 5,000 of, say, Buzzy’s Broccoli Beer, that would be your full position. You could buy that much and immediately have a full position, but if you think there is a good chance that Buzzy will drop in price soon, or if you don’t have $ 5,000 to spend now, you could establish a partial position by investing $ 2,500 now, with the intent on buying the remaining $ 2,500 later.
Buying in installments is actually a good strategy for investing for long periods and for people who are just starting to build a portfolio.
The school of the fool
If you want to be an experienced stock investor, you will need to learn how to orient yourself on financial statements. The three main ones are the balance sheet, the income statement and the cash flow statement. One of the first things to know about them is that many of the line items they contain have different names in reports from different companies.
In fact, even the names of financial statements can vary: for example, the income statement may also be called “income statement”, “consolidated income statement”, “income statement” or “income statement”. “The balance sheet could be presented as a” statement of financial condition “or perhaps a” consolidated balance sheet “.
Below are some of the main terms you will encounter in financial statements that have alternate names. Knowing alternative names can reduce confusion as you learn to get around these claims.
- Debts = debts.
- Receivables = trade receivables = receivables.
- Additional paid-up capital = capital exceeding the declared value = capital surplus = paid-up capital exceeding par.
- Profit = Net Profit = Net Profit = Net Profit.
- Earnings Before Tax = Income (Loss) Before Tax = Earnings Before Provision for Income Tax.
- Earnings per share = EPS = net earnings per share = net earnings per ordinary share.
- Stock = stocks of goods.
- Revenue = sales = net sales.
- Equity = shareholder participation = equity.
- Short-term debt = payable within one year = current portion of long-term debt.
Financial statements can be intimidating, but you can learn to read them and this can lead to better investment decisions and results. Check out books like Simplified accounting by Mike Piper (Simple Subjects, $ 15) for more information.
My dumbest investment
From DF, online: My dumbest investment was in Elon Musk’s company Tesla a few years ago. I had stocks when they were around $ 29 each and sold them for a small profit. As Homer Simpson would say, “D’oh!”
The Fool replies: Electric car specialist Tesla has seen its shares rise 12,000% over the past decade, with an average growth of over 60% annually. (For perspective, the S&P 500, which had a good decade, averaged 14.5% annually with dividends reinvested.)
While your decision to sell looks regrettable in the rearview mirror, it may have been smart at the time. First, you made a profit instead of a loss, which is always preferable. Think back to why you sold. Have you lost faith in the company or its management? Has something changed, making the reason you purchased no longer valid? If so, then selling was the right thing to do.
It’s not necessarily too late to make money on Tesla stock. Its stocks aren’t exactly cheap, with a recent P / E ratio above 165, so opinions are divided on how well it will perform over the next few years.
If you believe Tesla will be worth much more than its recent market value in the future (over $ 800 billion), consider buying. If not, pass or wait for a lower entry price. You will find many articles about Tesla on Fool.com.
Who I am?
My origins date back to 1984, when a University of Texas student (my namesake) founded me with $ 1,000, with the goal of making personal computers. I went public in 1988, started selling PCs online in 1996, and in 2001 I was the # 1 computer systems provider in the world. In 2013, I was deprived of a leveraged buyout, only to return to the stock market in 2018. (In 2016, with partners, I bought IT giant EMC for a whopping $ 67 billion.) I recently sported a market value of $ 67 billion. nearly $ 40 billion and grosses over $ 100 billion annually. Who I am?
Don’t you remember last week’s question? Find it here.
Last week’s curiosity response: Roark Capital