Long-Term Trends Bode Well for Tech Infrastructure Plays Now

Even with a modest slowdown in the overall economy in the first quarter of the year, and even with a potential recession if the second quarter also shows a slowdown, the world continues to improve. New technologies and networks are rolled out. New ideas hit the drawing board.

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  • And there’s still ample demand for those products to make an investment in the right tech stocks now a worthwhile one.

    With a number of new developments in the space, semiconductor companies are likely to perform well for years to come. For memory chips specifically, that bodes well for companies like Micron Technology (MU), which can play to nearly any tech trend on the radar today – and those that are still on the drawing board.

    The company has recently reiterated its growth, with an eye towards the cloud and automotive markets leading the way.

    Shares are down 16 percent in the past year, but earnings are up 275 percent. That’s led to shares trading at just 6 times forward earnings, and the stock carries a fat 29 percent profit margin.

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  • Action to take: Shares look attractive under $75.00 for long-term investors. And the company raised its dividend by one-third, although the starting yield is still a bit low at 0.6 percent.

    For traders, this could be a strong rebound play, given that shares are well off their highs of $98. The November $80 calls, last going for about $4.60, could deliver mid-to-high double-digit growth in the coming months.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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