5 Cheap Value Stocks to Buy According to Seth Klarman

1. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 74 

PE Ratio: 9.10

Share Price as of December 26: $50.20  

Micron Technology, Inc. (NASDAQ:MU) designs, manufactures and sells memory and storage products worldwide. On December 21, Micron Technology declared a quarterly dividend of $0.115 per share, in-line with the previous. The forward yield was 0.9%. At the end of the third quarter, Seth Klarman’s Baupost Group owned 3.3 million shares worth $164.6 million in Micron Technology, Inc. (NASDAQ:MU).

On December 7, Wells Fargo analyst Aaron Rakers maintained an Overweight rating on Micron Technology, Inc. (NASDAQ:MU) stock and lowered the price target to $70 from $75, noting that instead of the previously expected first half of 2023, the downturn’s bottom is relocating to mid- or later in 2023.

At the end of the third quarter of 2022, 74 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in Micron Technology, Inc. (NASDAQ:MU), compared to 69 in the preceding quarter worth $2.2 billion.

In its Q2 2022 investor letter, Meridian Funds, an asset management firm, highlighted a few stocks and Micron Technology, Inc. (NASDAQ:MU) was one of them. Here is what the fund said:

“Micron Technology, Inc. (NASDAQ:MU) is a leader in the production of DRAM and NAND memory. We invested in the stock in the third quarter of 2019 during a cyclical downturn in the memory industry. Our rationale was that, while the memory industry is cyclical, we believed there are strong secular drivers in place that will lead to higher peaks and long-term growth. Our secular thesis is based on our conviction that the quest for ever-increasing compute speeds will increasingly rely on memory to solve bottlenecks and that increased memory content in nearly everything from mobile phones to automobiles will drive demand. Micron’s stock traded lower during the quarter due to macroeconomic concerns that led to lower earnings expectations. We increased our stake in the company, as we believe our secular thesis remains intact. We wanted to take advantage of what we view as temporary cyclical concerns that caused the stock to trade at less than 10x reasonable trough earnings per share (EPS) estimates and less than 7x recent peak EPS.”

You can also take a peek at 11 Best Penny Stocks To Buy and 12 Best Tech Stocks for Long-Term Growth.