Taiwan Semiconductor Manufacturing Stock Buy Recommendation Reiterated (TSM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Taiwan Semiconductor Manufacturing (NYSE: TSM) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 12.4%. Since the same quarter one year prior, revenues rose by 31.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • TAIWAN SEMICONDUCTOR MFG CO has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, TAIWAN SEMICONDUCTOR MFG CO increased its bottom line by earning $1.10 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $1.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 37.9% when compared to the same quarter one year prior, rising from $1,063.27 million to $1,466.14 million.

Taiwan Semiconductor Manufacturing Company Limited engages in the computer-aided design, manufacture, packaging, testing, sale, and marketing of integrated circuits and other semiconductor devices. Taiwan Semiconductor has a market cap of $94.25 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 21.1, above the S&P 500 P/E ratio of 17.7. Shares are up 5.9% year to date as of the close of trading on Thursday.

You can view the full Taiwan Semiconductor Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
null

If you liked this article you might like

S&P 500 and Dow Score Records With Wall Street Upbeat Ahead of Fed

Nvidia Inspires Chipmaker Gains but Rest of Tech Gets Left Behind

These Apple iPhone Supplier Stocks Are Ones You Must Own Now: Goldman Sachs

These Are the 27 Companies You Must Watch Ahead of Apple's Big Launch Event

Broadcom and Others Should Be iPhone 8 Winners, but Synaptics Might Be a Loser