This is definitely today’s big news “God Stock Buffett buys TSMC”. According to Berkshire’s quarterly 13F report submitted to the US Securities and Exchange Commission (SEC) after the close on November 14, during the third quarter (July-September), it purchased approximately 60.1 million units of TSMC’s ADR for the time being first, With a value of US$4.12 billion and a share ratio of nearly 1.4%, it has become TSMC’s fifth largest shareholder.
As soon as the news came out, investors were discouraged. Buffett, who has never invested in high-tech stocks, admitted in the past that he missed high-tech stocks such as Amazon and Facebook (now renamed Meta) . May 2016 he bought Apple for the first time Stocks, this time buying TSMC, and buying 1.4% of the shares at the same time, really reminds people: “Has Berkshire’s investment strategy changed?”
About this issue, we can find out from Berkshire’s latest big changes to shares in Q3.
Important changes in Berkshire’s holdings
According to Berkshire’s latest major share changes in Q3, the new additions are: TSMC (TSM-US), Louisiana-Pacific (LPX-US), and Jefferies Financial Group (JEF-US). We need no introduction to TSMC, the other two being the world’s largest manufacturer of oriented strand board (OSB), a manufacturer of engineered wood building products, and a global investment bank.
Berkshire’s currently overweight stocks include: Chevron (CVX-US), Occidental Petroleum (OXY-US), Paramount Class B shares (PARA-US), Celanese (CE-US), RH (RH-US) US), the industry is classified in automobiles, energy, media, chemicals and luxury furniture.
Shares unchanged include: Apple (AAPL-US), Bank of America (BAC-US), Coca-Cola (KO-US), Hewlett-Packard (HPQ-US), Amazon (AMZN-US), Johnson & Johnson (JNJ-US) US); and the reverse discount is STORE Capital (STOR-US), which belongs to the real estate investment trust company in the United States.
Looking at the top five holdings: Apple, Bank of America, Chevron, Coca-Cola, and American Express (AXP-US), I personally judge that Berkshire’s investment strategy has not changed much. So why did you choose to buy TSMC stock?
Evaluate TSMC from 7 aspects
You may know that Buffett learned from value investing master Benjamin Graham. Investment targets must comply with the principle that the market price is lower than the intrinsic value, however, Buffett later absorbed the essence of another investment master Philip Fisher, that is, from the traditional “value investment” to “growth investment “. “.
Philip Fisher believes that a growth company must have: (1) long-term sales growth, (2) competitive advantage, (3) management ability, (4) vision, (5) research and development of the company, (6) Strong profitability , (7) internal relationships within the company, these seven aspects performed well. Therefore, Buffett proposed the “Moat Theory”, which is basically based on Philip Fisher’s growth value investment.
From this point of view, Buffett would choose TSMC to invest, and it would not be unreasonable. Because in addition to the relatively low dividend yield, it is a temporary choice in terms of competitive advantages, management capabilities, profitability, research and development, and internal company relations…etc. Of course, I believe that TSMC’s decision to set up a factory in the United States was likely the final touch that prompted Buffett to decide to invest.
Looking back at the stock price of TSMC (2330) in the past month, the stock price once fell to 370 yuan, and the stock price broke through 470 yuan on the closing day, and the increase was close to 30% in 15 day trading , not losing to other small and medium stocks. Investors who previously bought into high-end stocks, but got stuck all the way, should have swept the fog away by now.Just because this wave of rebound is too fast, what should investors who are currently empty-handed but want to intervene do? Do you want to enter the market now to help the stock god carry the sedan chair?
There can be two risks in chasing higher now
I don’t think so. As we described in the previous article, TSMC’s share price has risen significantly in the short term, and there may be two risks associated with intervening at this time.
1. Performance risk
In the latest conference, TSMC announced that the EPS in the first three quarters reached 27.79 yuan, surpassing the whole of last year. However, in the fourth quarter, due to customer inventory adjustments, the revenue was flat from ‘to compare with the third quarter. it is valued in US dollars, it will probably fall. In the 19.9 billion to 20.7 billion US dollars, but the NT dollar turned from depreciation to appreciation in the fourth quarter, and is expected for the revenue to fall slightly compared to the third quarter. We can see some clues from two successive reductions in TSMC’s capital spending.
2. technical backpressure
TSMC’s stock price has risen this wave, all the way through, breaking through the 5-day moving average, 10-day moving average, 20-day moving average, and 60-day moving average.Under the short-term rapid rise, profit-taking selling pressure will inevitably emerge; in addition, the downward pressure line was formed from the high point of 688 yuan at the beginning of the year to the rebound high point of 527 yuan in August will also meet this week. “Don’t buy in case of pressure, don’t sell in case of support” is the most basic operating mentality in stock investing, so I don’t recommend getting involved right now.Please refer to Appendix 1.
Figure 1. TSMC weekly K line
Source: Dafu Information
The target price of most foreign funds is above 600 yuan
However, despite the two potential risks, TSMC will still be a worthy target to use if there is a pullback. Given the current target price of foreign capital, 6 foreign capitals are higher than 600 yuan: Macquarie, UBS, Credit Suisse, Morgan Stanley, Nomura, JPMorgan Chase, and Daiwa Cathay Pacific have target prices of 811 yuan, 745 yuan, 600 yuan, 720 yuan, 700 yuan, 650 yuan, and 655 yuan. There are also 4 foreign investors above 500 yuan: Bank of America, Lyon, Goldman Sachs, and Citigroup, with target prices of 590 yuan, 560 yuan, 550 yuan, and 570 yuan. Refer to Schedule 1.
Therefore, friends who are ready to invest in TSMC for a long time may want to take advantage of the next wave of drawbacks and undertake them in batches. I wish everyone a successful investment!
Table 1. Target price given to TSMC by foreign investors
| TSMC target price | Foreign securities company |
|---|---|
| 600 yuan or more | Macquarie, UBS, Credit Suisse, Morgan Stanley, Nomura, JP Morgan, Daiwa Cathay Pacific |
| 500 yuan or more | Bank of America, CLSA, Goldman Sachs, Citigroup |
Data collection: Chen Weitai
About the Author_Chen Weitai
Having been part of the financial securities industry for more than 17 years, he is a qualified securities analyst, currently the chief investment officer of Zhongying Fortune, a financial consultant of CMoney Quanyao, a leading financial writer, and a lecturer at the Securities Foundation and Community University Zhongzheng, this week, Yahoo financial column, Shangzhou Fortune Net special writer.
The investment mindset focuses on the long-short cycle of the general economy, and combines fundamental stock selection and technical operations; he believes that “choosing the opportunity to enter the market” is the way to make money in stock market investment. There are currently 2 books: “Trust me, you can’t make enough money”, “The history of the Taiwan stock market”.
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