Korean memory chip manufacturer SK Hynix (NASDAQ: SKHY) stock jumped 4% through 10 a.m. ET Monday -- and it has Donald Trump to thank for it. Over the weekend, Trump Commerce Secretary Howard Lutnick told The Wall Street Journal that the Trump administration "is not in favor" of plans floated by Apple (NASDAQ: AAPL) to solve its supply problems by buying memory chips from Yangtze Memory Technologies and CXMT in China.
This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.
Continue » The Trump Administration doesn't necessarily favor Apple buying memory chips from Korea. White House spokesman Kush Desai is quoted as assuring investors that "reshoring semiconductor manufacturing [to America] is a top priority" -- which sounds like good news for DRAM specialist Micron (NASDAQ: MU) and flash memory expert Sandisk (NASDAQ: SNDK). Still, given his druthers, I suspect the President would prefer Apple (and others) buy their memory chips from a friendly country such as South Korea rather than from China, which has a habit of underpricing rivals to drive them out of business -- then turning around and cutting off supply for geopolitical purposes.
Long story short, the President's policy could well benefit not just Micron and Sandisk, but their rival SK Hynix as well. So does this mean it's time for you to buy SK Hynix stock? Priced today at 8.1 times trailing earnings, SK Hynix costs less than either Sandisk (at 21.4x) or Micron (at 21.7x earnings).
Analysts polled by S&P Global Market Intelligence will tell you all three stocks are "buys," given Sandisk is expected to grow its earnings at nearly 40% annually over the next five years, and Micron might average closer to 173% per year. SK's right in the middle at a projected 86% growth rate. Before you buy stock in SK Hynix, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SK Hynix wasn't one of them.
The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $421,511!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,381,960!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage.
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