Back to top

Image: Bigstock

Magnachip (MX) Moves 16.5% Higher: Will This Strength Last?

Read MoreHide Full Article

Magnachip (MX - Free Report) shares ended the last trading session 16.5% higher at $17.51. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 14.2% loss over the past four weeks.

The upswing in Magnachip's share price can be attributed to recent rumors that South Korea's LX Group is looking the acquire the company.

This chip products maker is expected to post quarterly earnings of $0.25 per share in its upcoming report, which represents a year-over-year change of +13.6%. Revenues are expected to be $106.15 million, down 13.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Magnachip, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Magnachip is a member of the Zacks Semiconductor - Analog and Mixed industry. One other stock in the same industry, Monolithic Power (MPWR - Free Report) , finished the last trading session 6.1% lower at $394.37. MPWR has returned -15.9% over the past month.

For Monolithic, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.26. This represents a change of +54.8% from what the company reported a year ago. Monolithic currently has a Zacks Rank of #3 (Hold).

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Monolithic Power Systems, Inc. (MPWR) - free report >>

Magnachip Semiconductor Corp. (MX) - free report >>

Published in