NEW YORK (TheStreet) -- Taiwan Semiconductor (TSM) shares are up 2.22% to $22.31 in trading on Monday after the the world's largest chipmaker reported a 56% increase in October sales over the previous year.
The company reported consolidated sales of $2.65 billion in October, a 7.9% increase over its September sales mark.
Consolidated sales over the first 10 months of the year are up 23.5% over the same period in 2013.
On October 16, the company reported earnings of 2.94 New Taiwan dollars per diluted share, ahead of analysts 2.82 New Taiwan Dollars per diluted share estimates, while also reporting a 28.6% year-over-year growth in revenue to 209.05 billion New Taiwan Dollars, ahead of analysts' 208.23 billion expectations for the period.
TheStreet Ratings team rates TAIWAN SEMICONDUCTOR MFG CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TAIWAN SEMICONDUCTOR MFG CO (TSM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 38.2% 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 two years. We feel that this trend should continue. During the past fiscal year, TAIWAN SEMICONDUCTOR MFG CO increased its bottom line by earning $1.18 versus $1.10 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.18).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 35.7% when compared to the same quarter one year prior, rising from $1,798.78 million to $2,440.28 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.4%. Since the same quarter one year prior, revenues rose by 18.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- TSM's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TSM has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: TSM Ratings Report