GFS

Taiwan Semiconductor Impresses in Second Quarter, Gives Strong Outlook

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Image: Taiwan Semiconductor reported better-than-expected second quarter results. By Brian Nelson, CFA Taiwan Semiconductor (TSM) reported strong second quarter results on July 18. On a year-over-year basis, second-quarter revenue advanced more than 40%, while net income and diluted earnings per share increased more than 36%. Taiwan Semiconductor is experiencing strong momentum behind its operations as second-quarter revenue and net income showed a 13.6% and 9.9% sequential increase, respectively. Its revenue growth in the quarter was also better than guidance. The company’s gross margin, operating margin, and net profit margin were 53.2%, 42.5%, and 36.8% in the quarter, respectively. Its gross margin and operating margin came in ahead of guidance. During the second quarter, shipments of 3-nanometer accounted for 15% of … Read more

Earnings Roundup: PEP, DIS, ARM, PM

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By Brian Nelson, CFA Dividend Aristocrat Pepsi (PEP) Raises Dividend for 52nd Consecutive Year On February 9, Best Ideas Newsletter portfolio holding Pepsi reported mixed fourth quarter results that showed revenue pressures but a modest beat with respect to non-GAAP earnings per share. Organic revenue growth was 4.5% in the period, lower than the consensus forecast calling for 5.9% expansion, while core constant currency earnings per share increased 9%. The company experienced organic volume declines across the board in its operating divisions, with the greatest weakness coming from its Quaker Foods North America segment, where volumes fell 8%. Management seemed cautious in the quarterly press release noting that it “navigated another year of elevated levels of inflation, macroeconomic volatility, geopolitical … Read more

Apple’s Big “Wonderlust” Event Is Business as Usual

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Image Source: Apple By Brian Nelson, CFA On September 12, Apple Inc. (AAPL) hosted its widely-anticipated “Wonderlust” event. The market was anticipating several new products, and Apple delivered. The firm’s iPhone 15 Pro, iPhone 15, Apple Watch Series 9, and Apple Watch Ultra 2 will go a long way to retaining share in smartphones and wearable devices, but the company opted to leave prices unchanged. Many had been expecting a price increase, but we’re not reading too much into Apple’s decision to leave them unchanged, given economic uncertainty in the U.S., Huawei’s release of its latest phone (the Mate 60 Pro) and rising geopolitical tensions between the U.S. and China. The iPhone 15 Pro frankly looks awesome, and it is … Read more

Call Me Unconcerned

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Image: Large cap growth has dominated returns the past five years. The Best Ideas Newsletter portfolio continues to have significant exposure to this area. By Brian Nelson, CFA When it comes to the financial markets, the debt ceiling debate is nothing to worry about. Countries (sovereigns) cannot generally default on debt that is denominated in their own currency. The concern that there will be any sort of calamity if the U.S. government doesn’t raise the debt ceiling is far overblown, in our view. The political will of the U.S. to pay its debt will only resolve itself in time, and any risk premium built into Treasuries as a result of the debt ceiling showdown will be fleeting. Of course, nobody … Read more

Nice! — NASDAQ-100 Follows Through on Breakout

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Image: NASDAQ-100 breaks through August 2022 resistance. NOW READ: There Are No Free ‘Income’ Lunches ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Tickerized for holdings in the QQQ. Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.         Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and … Read more

Taiwan Semiconductor Experiences Revenue Weakness in March

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Image: Taiwan Semiconductor’s shares have rallied nicely since the beginning of November of last year. By Brian Nelson, CFA Taiwan Semiconductor (TSM) reported March revenue on April 10. During the month, net revenue dropped nearly 11% on a sequential basis and more than 15% on a year-over-year basis from March 2022. Though the top-line weakness in the month was somewhat of a surprise, the company’s revenue advanced 3.6% during the first quarter of this year. The Taiwanese chip fabricator is an idea for the risk-seeking investor that is looking for exposure to the semiconductor space. The company pays a decent dividend yield, and the high end of our fair value estimate for shares stands at $90 per share. Taiwan Semiconductor’s … Read more

Taiwan Semiconductor’s Operations Remain Solid But Uncertainty Has Punished the Stock

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Image: Taiwan Semiconductor’s shares have faced considerable pressure during 2022, despite strong operational performance. By Brian Nelson, CFA Taiwan Semiconductor Manufacturing Company’s (TSM) shares have been cut in half this year as weakness across the tech space, uncertainty regarding new export restrictions, geopolitical tensions concerning China-Taiwan relations given Russia’s invasion of Ukraine, and general market malaise, particularly across the chip sector, have weighed on the company. Our fair value estimate stands at $66, about in-line with where they are trading at the time of this writing. One really wouldn’t think TSM’s shares would be down so much during 2022 given the company’s recent fundamental performance, however. When it reported third-quarter results October 13, revenue advanced 35.9%, while third-quarter earnings per … Read more

Microsoft Hinted at Trouble in Calendar Q2 But AMD’s Massive $1 Billion Quarterly Q3 Revenue Miss Spells Big Problems for PC Market; Search and News Advertising Revenue Also Likely Weakening Substantially

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  Image Source: Fritzchens Fritz By Brian Nelson, CFA Things aren’t going well across the technology (XLK) landscape these days. Microsoft Corp (MSFT) said in mid-July Windows OEM revenue faced pressure in its quarter ended June 30, its fourth quarter of fiscal 2022, and noted that the “PC market…deteriorated in June (slide 15).” On its fourth-quarter fiscal 2022 conference call, the software and gaming giant said that its outlook “has the trends (it) saw in June continu(ing) through Q1 (the quarter ending in September 2022). Continued weakness in the PC market demand and advertising spend (is expected to) impact Windows OEM, Surface, LinkedIn and search and news advertising revenue.” We took note of this weakness at the time, but it … Read more

Things Are Bad Out There

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“I don’t like this market one bit, but we have to endure. Markets will rise again, but there will be a lot more pain to come in the near term. We think the base case is that we get a very bad recession in 2023. We’ve yet to pull the trigger on put option ideas in the simulated newsletter portfolios, but we expect things to get worse before they get better. For readers seeking ongoing option ideas each month, please consider subscribing to our options commentary here.” – Brian Nelson, CFA By Brian Nelson, CFA Things are bad out there, and there’s probably no better way to say it. On September 28, Bloomberg reported that Apple Inc. (AAPL) is now … Read more

Update on Newsletter Portfolio Idea Apple

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Image Shown: Shares of Apple Inc have rebounded strongly from their recent lows as of late August 2022. By Callum Turcan Apple Inc (AAPL) reported third-quarter results for fiscal 2022 (period ended June 25, 2022) that beat both consensus top- and bottom-line estimates. Management also noted during Apple’s latest earnings update that supply chain constraints were beginning to ease a bit and that Apple’s near-term growth outlook was improving. We continue to like Apple as an idea in the newsletter portfolios. Shares of AAPL yield ~0.6% as of this writing, and there is an enormous amount of room for Apple to aggressively grow its per-share payout going forward given its financial strength. Earnings Update Apple’s GAAP revenues rose 2% year-over-year … Read more