Intel Corporation (INTC), Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (TSM): Technology Stocks to Consider

Page 1 of 2

When looking for a new computer, there are certain terms that are common. Intel Corporation (NASDAQ:INTC) is one of them. I mean Mac and Windows run on Intel processors today. When looking for smartphones, ARM Holdings plc (ADR) (NASDAQ:ARMH) is the equivalent, but the brand is not as visible. Taiwan Semiconductor (NYSE:TSM) Manufacturing is the puppeteer behind the previous two.

You are the king

Intel Corporation (NASDAQ:INTC)

Despite having reported a decline in revenue and earnings, Intel Corporation (NASDAQ:INTC) remains a strong company and has positive prospects. As technology continues to advance over daily life, smaller and more efficient semiconductors will be needed. Also, the company has an interesting shareholder reward program.

Intel Corporation (NASDAQ:INTC) is the worldwide leader in PC processors, enabling it to have a spotless balance sheet and generate solid cash flow. The firm has, nonetheless, entered into many other aspects of the computing business. Recently, it has been able to strike partnerships with Google, NVIDIA, ASML, and finally acquired McAfee, that will accelerate the firm’s vertical integration and widen its product offerings.

R&D is an area on which Intel Corporation (NASDAQ:INTC) puts great emphasis through its tick-tock strategy. New products are expected to become more energy-efficient and smaller, for the PC user and the enterprise. Servers are of particular attention, given the increasing demand for cloud computing and virtualization. Additionally, the firm has great business opportunities for security and processor manufacturing technology for mobile devices.

Holding almost 80% of the market share for processors, Intel Corporation (NASDAQ:INTC) is the industry leader. Trading at 11 times its earnings, about half the industry average, investors have a chance to make a buck. Given the firm’s market position, it is recommended as a buy for the long-term.

Lying is good

In the technology industry, announcements of future products can help pull investors into buying stock. Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) has made several statements of the kind. But, what if the claims are straight out lies? Basically, risks are higher than contemplated and returns may be cut short.

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) is a leading foundry operator, and thus, enjoys a small economic moat, limited by cheap market entry. The company holds a technological edge difficult for competition to match. Hence, current and future competitors will have a run for their money since it also retains pricing leverage.

On the financial side, Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) sports a strong background with no debt and rising revenue. But, cash flow and free cash has been declining while net income has stabilized. Competition is raising the bets, and giants like Intel and Apple Inc. (NASDAQ:AAPL) have been dumping dollars to displace the firm from its leading position.

Given the rising competition, the firm’s statements have to be taken as part of the business strategy. Evidence of the success for the company’s strategy can be found on the steady rise of its stock price, sane finances, and technological edge. It is recommended as a buy since competition remains low and might not match its quality for several years.

R&D and royalties may not stop competition

After demystifying ARM Holdings plc (ADR) (NASDAQ:ARMH)’s superiority over Intel Corporation (NASDAQ:INTC), the stock price deflated considerably. Nonetheless, the company posted positive results for its first quarter of 2013. The firm holds an important market share for mobile devices. Its legacy is based on low power consumption and wide intellectual property.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!