Micron (NASDAQ: MU) is among the cheapest stocks in the market. It trades at just 5.2 times forward earnings on Oct. 29, a huge discount to the broader market. The S&P 500 (SNPINDEX: ^GSPC) trades for 19.2 times forward earnings, so it's a huge mismatch, and the reason for the discount is rooted in Micron's history. Micron manufactures memory chips, and the industry is cyclical. Micron has a history of its business booming and busting, but with it going through its biggest boom ever, the downturn could be catastrophic. As a result, the market is valuing it at a discount. However, I think that's misguided, as Micron is taking steps to reduce the magnitude of its eventual downturn. Furthermore, this downturn may not materialize for years, lending Micron ample time to deliver significant shareholder returns. Image source: The Motley Fool.
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