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Should You Invest in Magnachip Semiconductor Corporation (MX)?

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Wasatch Global Investors, an investment management firm, published its “Wasatch Micro Cap Value Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 14.74% was recorded by the fund’s investor class for the Q1 of 2021, trailing the benchmark, Russell Microcap® Index, which leapt 23.89% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Wasatch Micro Cap Value Fund, in its Q1 2021 investor letter, mentioned Magnachip Semiconductor Corporation (NYSE: MX), and shared their insights on the company. Magnachip Semiconductor Corporation is a Cheongju-si, South Korea-based semiconductor manufacturing company that currently has a $1.1 billion market capitalization. Since the beginning of the year, MX delivered a 77.66% return, extending its 12-month gains to 116.79%. As of May 10, 2021, the stock closed at $24.02 per share.

Here is what Wasatch Micro Cap Value Fund has to say about Magnachip Semiconductor Corporation in its Q1 2021 investor letter:

"Magnachip Semiconductor Corp. (MX) also contributed to Fund performance. The company designs, develops and manufactures mixed-signal and digital multimedia semiconductors. We think Magnachip is a classic “growth at a reasonable price” (GARP) company. The stock was a laggard in 2020, but our belief was that Wall Street underappreciated the company’s earnings and that the P/E ratio would exceed expectations going forward. In the first quarter, we think Magnachip benefited from the realization that the company is a steady—if not spectacular—grower as there was a rotation in preference away from higher-priced growth stocks and toward lower-priced growth stocks. The stock also benefited from news that the company has agreed to be acquired."

Semiconductor
Semiconductor

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Our calculations show that Magnachip Semiconductor Corporation (NYSE: MX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Magnachip Semiconductor Corporation was in 28 hedge fund portfolios, compared to 27 funds in the third quarter. MX delivered a 23.31% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.