Analyzing SmartKem (NASDAQ:SMTK) and Magnachip Semiconductor (NYSE:MX)
by Michael Walen · The Markets DailySmartKem (NASDAQ:SMTK – Get Free Report) and Magnachip Semiconductor (NYSE:MX – Get Free Report) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Analyst Recommendations
This is a summary of current ratings and target prices for SmartKem and Magnachip Semiconductor, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SmartKem | 1 | 0 | 0 | 0 | 1.00 |
| Magnachip Semiconductor | 1 | 1 | 0 | 0 | 1.50 |
Profitability
This table compares SmartKem and Magnachip Semiconductor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SmartKem | -3,997.69% | -520.47% | -168.25% |
| Magnachip Semiconductor | -17.26% | -5.84% | -4.10% |
Insider and Institutional Ownership
74.3% of Magnachip Semiconductor shares are owned by institutional investors. 3.5% of SmartKem shares are owned by company insiders. Comparatively, 10.9% of Magnachip Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares SmartKem and Magnachip Semiconductor”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SmartKem | $700,000.00 | 1.88 | -$10.51 million | ($107.00) | -0.02 |
| Magnachip Semiconductor | $178.86 million | 0.61 | -$29.72 million | ($0.84) | -3.58 |
SmartKem has higher earnings, but lower revenue than Magnachip Semiconductor. Magnachip Semiconductor is trading at a lower price-to-earnings ratio than SmartKem, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
SmartKem has a beta of 3.51, indicating that its stock price is 251% more volatile than the S&P 500. Comparatively, Magnachip Semiconductor has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500.
Summary
Magnachip Semiconductor beats SmartKem on 8 of the 12 factors compared between the two stocks.
About SmartKem
SmartKem, Inc. develops electronics transistors using its proprietary advanced semiconductor materials. Its technology can be used in a range of applications including next generation MicroLED, LCD and AMOLED displays, as well as advanced computer and AI chip packaging, and a new type of sensor. The company was founded on September 21, 2018 and is headquartered in Blackley, the United Kingdom.
About Magnachip Semiconductor
Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, computing, industrial, and automotive applications. It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, monitors, notebook PCs, tablet PC and TVs applied with liquid crystal display, organic light emitting diodes (OLED), and micro light emitting diode (Micro LED) panel. The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for power suppliers, e-bikes, photovoltaic inverters, LED lighting, and motor drives; and OLED display driver integrated circuit products. It serves consumer, computing, communication, automotive and industrial electronics OEMs, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in the Asia Pacific, the United States, and Europe. The company sells its products through a direct sales force, as well as through a network of agents and distributors. Magnachip Semiconductor Corporation was incorporated in 2003 and is based in Cheongju-si, South Korea.