5 Best ADR Stocks to Buy in 2021

4. Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM)

Number of Hedge Fund Holders: 76  

Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is a Taiwan-based semiconductor manufacturer founded in 1987. It is placed fourth on our list of 10 best ADR stocks to buy In 2021. The company’s shares have returned more than 103% to investors over the past year. The stock has climbed steeply in recent weeks as global supply chain issues drive up the prices of semiconductor chips and lead to a shortage that is expected to last for several months. 

On June 1, Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) announced at an annual gathering that it was on track to begin volume production of 5nm chips, already approved for usage in artificial intelligence products, at a chip fabrication plant in Arizona by 2024. 

At the end of the first quarter of 2021, 76 hedge funds in the database of Insider Monkey held stakes worth $10.8 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), up from 72 in the preceding quarter worth $11.8 billion. 

In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) was one of them. Here is what the fund said:

“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 8.9% during the quarter.

Similar to last quarter, the supply-demand imbalance in semiconductor chips continues to benefit TSMC. To fuel new technological advances and meet the current supply imbalance, we see significantly increased capital spending across the industry over the coming years.

TSMC has an extraordinary track record of return on these large investments despite their rapid historical cadence of expansion. I remain hopeful that the large capital expenditure plan they now have ($100 billion of investment over the next three years) will be money well spent and not lead to industry oversupply in the medium term. Hopefully, future returns on these investments will look as good as those of the past.”