TheStreet Ratings’ stock model projects a stock’s total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
TheStreet Ratings model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e. how much one is willing to risk in order to earn profits?; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock’s valuation as compared to its stock’s performance.
These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. As always, stock ratings should not be treated as gospel – rather, use them as a starting point for your own research.
Here’s our analysis of five out of 50 stocks TheStreet Ratings has identified as being rated a “Buy” heading into the New Year. To view a list of all 50 stocks simply download our free report.
Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing is rated by TheStreet Ratings as a buy with a grade of A+. The company’s strengths can be seen in multiple areas, such as its revenue growth, increase in net income, solid stock price performance and growth in earnings per share. Although the company may harbour some minor weaknesses, we feel they are unlikely to have a significant impact on results.
- TSM’s very impressive revenue growth greatly exceeded the industry average of 4.0 per cent. Since the same quarter one year prior, revenues leaped by 65.0 per cent. Growth in the company’s revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 99.9 per cent when compared to the same quarter one year prior, rising from $861.41-million to $1,722.05-million (U.S.).
- Powered by its strong earnings growth of 94.11 per cent and other important driving factors, this stock has surged by 29.45 per cent over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock’s future course, although almost any stock can fall in a broad market decline, TSM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The company reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, it reported lower earnings of $0.86 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.86).
Taiwan Semiconductor Manufacturing Company Limited engages in the computer-aided designing, manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices; and manufacturing masks. It has a market cap of $87.25-billion and is part of the technology sector and electronics industry.
View the full Taiwan Semiconductor Ratings Report.
MasterCard Incorporated is rated by TheStreet Ratings as a buy with a grade of A+. The company’s strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.