u/Good-Bid-7325 ·
Reddit — r/ValueInvesting
· February 25, 2026 at 18:51
· ⬆ 56 pts
· 💬 53 comments
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AI Summary
Summary
The post argues against buying "falling knives" (stocks that have dropped significantly) and instead advocates for investing in undervalued stocks that also exhibit strong positive momentum.
The author presents Micron Technology ($MU) as a prime example of this strategy, citing its low valuation multiples (P/E, PEG) relative to peers, strong recent stock performance, and improving fundamentals driven by the AI-led memory upcycle.
Quality assessment: This is a thesis-driven stock pitch with supporting data points. While not a deep-dive DD, it presents a clear, reasoned argument based on valuation, momentum, and industry trends.
Score56
Comments53
Upvote %82%
▶ Full Post Text
This sub is way too full of stock suggestions where the main rationale is basically: “This stock was much higher before and now it’s dropped a lot, so it must be cheap.”
But that’s not really how markets work. More often than not, trends continue. Big drops usually have real reasons behind them. Just being down 60% from ATH doesn’t automatically make something undervalued. That's why I prefer to stick to great stocks that have positive momentum behind them, while also being at a cheap valuation.
Here's a pick of mine that fits this criteria: Micron ($MU).
$MU’s P/E is attractive at around 10.5, offering more than a 50% discount relative to sector peers. The forward PEG is even more insane at 0.19, which is 87% below the sector median. All that while the stock is up 347% 1Y. At the same time, minor dips and negative news have not affected the stock in any meaningful way and it keeps getting positive earnings revisions.
Yes, memory is cyclical, but we’re currently in a pricing upcycle driven by AI-related demand and constrained supply. The stock isn’t just rebounding from a crash, fundamentals are actually improving.
Would love to see what names you guys have that fit my criteria.