Warren Buffett just bought more than $5 billion of this semiconductor stock. TSMC Taiwan Semiconductor Manufacturing Company. For more detailed analysis visit our website https://www.overlookedalpha.com
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NewsTranscript
00:00 Warren Buffett just bought shares in TSMC and that news sent the stock up more than
00:04 10%.
00:05 Looking at the fundamentals it's easy to see why Buffett likes this manufacturer of
00:09 microchips.
00:10 With $13.1 billion in net cash, TSMC has an enterprise value of $410 billion and the company
00:15 made $71.7 billion of revenue over the last 12 months.
00:19 That means TSMC is valued around 5.7 times revenue and just under 14 times earnings.
00:25 That's pretty cheap for a company that has grown revenue on average 14% a year over the
00:29 past 10 years and earnings per share more than 18% per year.
00:33 A key risk investing in TSMC is if China continues hostilities towards Taiwan.
00:38 The company relies on parts made in mainland China and TSMC could end up in the middle
00:42 of a tit for tat between the US and China.
00:45 Buffett clearly thinks the company is indispensable and at 14 times earnings the stock looks like