In this article we will dive into TAIWAN SEMICONDUCTOR-SP ADR (NYSE:TSM) as a possible candidate for growth investing. Investors should always do their own research, but we noticed TAIWAN SEMICONDUCTOR-SP ADR showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Looking at the Growth

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. TSM was assigned a score of 8 for growth:

• TSM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.91%, which is quite impressive.
• TSM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.73% yearly.
• TSM shows a strong growth in Revenue. In the last year, the Revenue has grown by 33.89%.
• TSM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.02% yearly.
• Based on estimates for the next years, TSM will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.12% on average per year.
• Based on estimates for the next years, TSM will show a quite strong growth in Revenue. The Revenue will grow by 15.68% on average per year.

Health Analysis for TSM

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For TSM, the assigned 5 for health provides valuable insights:

• The Debt to FCF ratio of TSM is 1.13, which is an excellent value as it means it would take TSM, only 1.13 years of fcf income to pay off all of its debts.
• TSM has a better Debt to FCF ratio (1.13) than 75.93% of its industry peers.
• A Debt/Equity ratio of 0.22 indicates that TSM is not too dependend on debt financing.
• A Current Ratio of 2.44 indicates that TSM has no problem at all paying its short term obligations.
• A Quick Ratio of 2.21 indicates that TSM has no problem at all paying its short term obligations.

Profitability Assessment of TSM

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. TSM was assigned a score of 9 for profitability:

• The Return On Assets of TSM (17.53%) is better than 90.74% of its industry peers.
• Looking at the Return On Equity, with a value of 27.36%, TSM belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
• The Return On Invested Capital of TSM (20.58%) is better than 92.59% of its industry peers.
• TSM had an Average Return On Invested Capital over the past 3 years of 20.33%. This is significantly above the industry average of 11.36%.
• The 3 year average ROIC (20.33%) for TSM is below the current ROIC(20.58%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 40.54%, TSM belongs to the top of the industry, outperforming 95.37% of the companies in the same industry.
• In the last couple of years the Profit Margin of TSM has grown nicely.
• TSM has a better Operating Margin (45.68%) than 98.15% of its industry peers.
• TSM‘s Operating Margin has improved in the last couple of years.
• TSM has a better Gross Margin (56.12%) than 78.70% of its industry peers.
• In the last couple of years the Gross Margin of TSM has grown nicely.

Looking at the Setup

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. TSM scores a 7 out of 10:

Although the technical rating is bad, TSM does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a support zone below the current price at 173.12, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of TSM

Our latest full technical report of TSM contains the most current technical analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.