Good Time to Buy Micron Technology, Cummins?

Let’s talk about Micron Technology (NASDAQ:MU).

I’ve loved this company for a long time. It’s an American legend - funded by the “Potato King” J.R. Simplot back in Boise, Idaho in 1978.

Imagine that, a technology company in the heartland. Once the company went public, it had amazing runs in the stock. From 1990 to 1995 it went up 3,200% -- in just 5 years. Then it came all the way down, and then it had another run. Up 840% from 1996 to 2000... then it all fell apart.

BUT the magic is back, as the company is focused on innovation -- underscored this week with a product announcement aimed at cloud data centers and high performance computing. Its lineup of chips include DRAMs, Nam Flasks, solid state and hybrid memory.

As for execution, it was a problem for a long time, but not anymore. They have done extraordinarily well, each of the last few quarters we’ve seen the company beat. In fact, the Street now sees fiscal year 2015 going to $3.46 from $3.04. That’s a big improvement.

I think the company will take market share for years to come. In the meantime, the stock is changing hands at a PEG ratio of 0.5, which just means it’s cheap. And a forward PE of less than 10.

Technically I’m looking for the next leg up to go to $35, that’s a huge resistance point, and breakout from there, watch out shorts – $39 bucks.

Now let’s talk about Cummins Engine (NYSE:CMI).

The stock has been up on strong volume, and looks like it really wants to rally back to its all-time high.

Business has been uneven. This is a global company, but North America -- that’s where you see demand improving big time. Management already said they are taking market share in the medium duty engine.

But globally, Mexico slowed down. That’s not going to last for a long time. Mexico is one of the hottest economy’s out there, that’s going to come back -- and even Brazil, which has its issues, will get back online.

In the meantime, China continues to be a real strong growth market for them as well. Management recently raised their dividend by 25%, and authorized a buyback of $1 billion, as part of a commitment to return 50% of cash flow to shareholders. That’s great for you. You get to be paid while you wait on this big boy.

Right now I’m looking for it to rally back to $160, but over the next 52 weeks, this is a $200 stock.DISCLOSURES