Thursday, January 9, 2014

Why MagnaChip Is Poised to Keep Popping

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, consumer gadget chip maker MagnaChip Semiconductor (NYSE: MX  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at MagnaChip and see what CAPS investors are saying about the stock right now.

MagnaChip facts

Headquarters

Seoul, South Korea

Market Cap

$639.1 million

Industry

Semiconductors

Trailing-12-Month Revenue

$847.9 million

Management

Chairman/CEO Sang Park

President/COO Tae Young Hwang

Return on Equity (average, past 3 years)

38.1%

Cash / Debt

$183.0 million / $201.7 million

Competitors

Himax Technologies

Samsung Electronics

Taiwan Semiconductor Manufacturing

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 73 members who have rated MagnaChip believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star dreamjob, succinctly summed up the MagnaChip bull case for our community:

This small cap has very optimistic growth projections; however, when I shrink these down to single digits the company still looks like it is selling at a bargain. There's manageable debt and high [return on invested capital]/[cash return on invested capital]. Add the recent earnings surprise in the last 90 days and I think we are looking at a winner.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, MagnaChip may not be your top choice.

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