TSMC: Unprecedented Growth Outlook For A Company Of This Scale (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Taiwan Semiconductor Manufacturing Company Limited is a big company with $119 billion in annual revenues. Management has guided for 45% revenue CAGR over the next 5 years. This is unheard of at this scale.
• Making the outlook even more rosy is the fact that margins in TSMC's next-generation N2 node are expected to be structurally higher than that of the N3 node.
• TSM stock is trading at a mere 22.6x 1-yr fwd P/E below even that of the S&P 500, which is at 22.8x. Looks like a major mispricing to me.
• The geopolitical and tariff-related risks are mitigated somewhat as TSMC is clearly leaning and de-risking toward the side of the U.S. and the world.
• TSM's stock chart vs. the broader S&P 500 market index is clearly bullish. Why fight the trend? There is no reason to do so.

Read the full article here.