(3 November 2016)
TSM Business Overview
TSMC is the world’s first dedicated semiconductor foundry. As the founder and a leader of the Dedicated IC Foundry segment, TSMC has built its reputation by offering advanced and “More-than-Moore” wafer production processes and unparalleled manufacturing efficiency. From its inception, TSMC has consistently offered the foundry segment’s leading technologies and TSMC COMPATIBLE® design services.
- Price to Earnings: 24.07
- Earnings Per Share: $1.70
- Market Cap: 159.6B
- Current Ratio: 2.14
- Return on Equity: 23.54%
- Dividend Yield: 2.71%
- Total Debt to Equity Ratio: 20.23
Balance Sheet ($ in NT Billions)
- Total Assets decreased $85.8.
- Total Current Liabilities decreased $141.18.
- Total Equity increased $86.56.
- Inventory Turnover Days decreased from 54 days to 44 days.
Income Statement ($ in NT Billions)
- Net Revenue increased $38.6, or 17.4%
- Net Income increased $24.25, or 33.4%.
- Basic Earnings Per Share increased from $2.80 in 2Q to $3.73 in 3Q.
- Return on Equity increased by 7.8% from 23.4% to 31.2%.
Cash Flow Statement ($ in NT Billions)
- Net Cash provided by operating activities increased $19.73.
- Capital Expenditures increased $30.19.
- Cash Dividends were paid out in amount of $155.58, which is significant compared to last quarter where they did not pay a dividend.
- Free Cash Flow is down $10.46.
Highlights from 10-Q & News
- Renesas Electronics and TSMC Announce 28nm MCU Collaboration for NextGeneration Green and Autonomous Vehicles ( 2016/09/01 )
- TSMC’s Board approved the acquisition from VisEra Holding Company of 86.9% shareholding in VisEra Technologies Company Ltd. and 6.9% shareholding in Xintec Inc. to simplify investment structure ( 2016/08/02 )
Entry and Exit Points
- It has good support at the $28 level.
- It currently is around its all time high, with that being said, I can’t give a good estimate on what I believe the “this-is-way-overvalued-get-out” number, but given consistent balance sheets, continued growth, and a solid dividend, I’m going to go with $50.