1/ I like $NVDA but was surprised by how much they dominated this poll. I still feel like $TSM doesn't get the respect it deserves. Let's look at a few basic metrics of these stocks using @ycharts. $INTC $AVGO
2/ Just for fun. let's check in on how these stocks have fared over the past 3 years. The takeaway is that despite the cyclical nature of semi companies, all have still trounced the market over a sustained period. (Results even more pronounced over longer periods). 
3/ Revenue growth is always one of the first things I look at when evaluating investments.
There's always a few surprises when going through an exercise like this and admittedly I would not have thought $AVGO's revenue had grown the most out of this group over past 3 yrs.
There's always a few surprises when going through an exercise like this and admittedly I would not have thought $AVGO's revenue had grown the most out of this group over past 3 yrs.
4/ And yet when looked at the quarterly YOY growth rates $AVGO growth rate is decelerating while the others - in order: $TSM $INTC $NVDA - are moving up. Investing is hard, chips especially so!
5/ After looking at the top-line, let's look at net income growth.
There's so much going on here. If you were looking to invest, you'd definitely want to know what caused $AVGO's net income to spike, $NVDA's to basically flatline, and $TSM's to slowly decline over past 3 years.
There's so much going on here. If you were looking to invest, you'd definitely want to know what caused $AVGO's net income to spike, $NVDA's to basically flatline, and $TSM's to slowly decline over past 3 years.
6/ Now let's look at some valuation metrics, starting with free cash flow yield.
Remember, the higher the ratio the better return investors are receiving in exchange for their money.
Remember, the higher the ratio the better return investors are receiving in exchange for their money.
7/ Here's how they fare based on P/E ratios.
$INTC looks particularly attractive using this metric.
$INTC looks particularly attractive using this metric.
8/ Here's how these stocks measure on price-to-sales ratio.
$INTC also looks the best valued here.
$INTC also looks the best valued here.
9/ Don't run through metrics w/o looking at margins. Honestly, all the gross margins look relatively healthy, though if you were investing you'd definitely want to know why $TSM's has been steadily falling the past year.
Remember: Gross margin = Rev - COGS (cost of goods sold)
Remember: Gross margin = Rev - COGS (cost of goods sold)
10/ And yet by operating margin $TSM comes up smelling like roses while $AVGO and $NVDA have been steadily dipping.
11/ As I say every week, this doesn't complete a thorough look at these companies, but it does give us an insightful first glance.
The most important thing I look for is evidence of an economic moat. There's also management, strategy, balance sheets, etc.
The most important thing I look for is evidence of an economic moat. There's also management, strategy, balance sheets, etc.
12/ There's also future growth catalysts.
For instance, $TSM might be one of the best ways to capture 5G growth in China (makes necessary components for Huawei), where 5G is ahead of US networks.
Always do your own due diligence before investing!
For instance, $TSM might be one of the best ways to capture 5G growth in China (makes necessary components for Huawei), where 5G is ahead of US networks.
Always do your own due diligence before investing!
