The 5 Stocks That Stephen Perkins’ Toronado Partners Can’t Live Without

3. MagnaChip Semiconductor Corporation (NYSE:MX)

Toronado Partners’ Stake Value: $36,354,000

Percentage of Toronado Partners’ 13F Portfolio: 12.78%

Number of Hedge Fund Holders: 35

Toronado is also a fan of another chip maker, MagnaChip Semiconductor Corporation (NYSE:MX), which it owned 2.05 million shares of on September 30, a 24% increase quarter-over-quarter. It’s far from the only fund that’s been buying MagnaChip, as hedge fund ownership of the stock among the funds tracked by Insider Monkey sits at an all-time high.

MagnaChip Semiconductor Corporation (NYSE:MX) posted a sizable improvement to its gross margins in Q3, which grew by more than 50% to 36.7%. Supply constraints are expected to impact the South Korean chipmaker for the foreseeable future, however, which is likely to limit sales and earnings growth. Of further interest to investors is the fact that MagnaChip Semiconductor Corporation (NYSE:MX) has plans to launch another attempt to sell itself after its planned merger pact with two investment vehicles of Wise Road Capital fell through last year.

Wasatch Global Investors, an investment management firm, published its “Wasatch Micro Cap Value Fund” first quarter 2021 investor letter and mentioned MagnaChip Semiconductor Corporation (NYSE:MX). Here‘s what the fund said:

“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.”