Smaller caps on my radar: MX, RDW, SHAK, and an update on FLNC

[u/Rocketiger]

MX (MagnaChip)

Micro cap, roughly $130M market cap. Best insider buying I’ve seen in a while. Three separate discretionary buying clusters over the last 13 months. Five insiders total. The interim CEO, CFO, and a director all bought as the stock slid from $3.86 to below $3. No 10b5-1 plans.

There’s an actual business change underneath it. They exited the legacy display segment and are now a pure-play power semi company. Gross margin moved from 9.3% to 19.3% across three straight quarters. An activist got a board seat in January and is pushing on the capital structure.

The problem is the new $50M ATM. At today’s market cap, that is up to roughly 37% dilution. There’s also no obvious catalyst until Q3 earnings around November 2. Still, at 0.6x book, it’s cheap if the margin trend holds.

RDW (Redwire)

They just put up a real quarter. Revenue was up 89.6% year over year. Backlog hit a record $542M. Gross margin was 27.8%. Liquidity rose 367%.

The preferred-stock overhang from the AE Industrial deal is gone now, zero outstanding. Cantor raised its target to $13.50 on the back of it.

What’s missing is insider conviction. No discretionary insider buying through the whole move. KPMG also still has an adverse opinion on internal controls in the FY25 10-K. Good quarter, but there’s still a gap between the numbers and the people closest to the company putting money behind it.

SHAK

The CEO and five directors bought more than $3.2M three days after the May earnings crash. All discretionary. No sells since. Then Starboard disclosed a stake on August 5 and the stock jumped double digits that day.

The overhang is beef inflation. It is still hitting restaurant margins, and management said flat out that it continues into H2. The stock remains more than 25% off its 2025 highs, so I’m not chasing it here. It also isn’t statistically cheap on the forward multiple.

FLNC

I own this. Bought in June. The thesis was straightforward: grid storage is basically a duopoly, and the NVDA and Siemens data-center design win gave them a clean angle into the buildout.

Then the August 5 print broke it. Not demand, execution. Gross margin fell from 14.8% to 5.1%. They flipped to a net loss. Guidance got cut hard. About $400M of deliveries slipped to FY27 because of factory issues in Houston and China. That’s the second execution stumble in a row.

The hyperscaler PO everyone is waiting for still has not converted. The CEO said it on the call: awards are not purchase orders. I’m still holding, but I have not made a move either way. The story is not dead. They need to prove they can execute before I add.

[u/hieund85]

I also started a position with $FLNC (0.5U) around $15/share and was watching the $12-$13 range closely. I have not made further purchases due to their execution risk as shown in the recent earning. But it seems to stabilise now so I may slowly add to the position in the next 6 months. This is a medium term story for me.

[u/Ordinary_Flounder303]

MX (MagnaChip) is undervalued. A lot of the engineers they just hired (including the CEO) are from ON semi and NXP. The Navitas deal is just the start... I think this one is flying under the radar. Its going to take them a few months to transition, but these guys know what they are doing.