Hedge Funds Are Buying Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (TSM); Should You?

As industrywide interest jumped, some big names were leading the bulls’ herd. Prince Street Capital Management, managed by David Halpert, established the most valuable position in Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM). Prince Street Capital Management had $27.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $25.1 million position during the quarter. The other funds with new positions in the stock are Lawrence Sapanski’s Scoria Capital, Israel Englander’s Millennium Management, and Jacob Gottlieb’s Visium Asset Management.

Let’s now review hedge fund activity in other stocks similar to Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM). We will take a look at CVS Health Corp(NYSE:CVS), Allergan, Inc. (NYSE:AGN), Altria Group Inc (NYSE:MO), and Amgen, Inc. (NASDAQ:AMGN). This group of stocks’ market values resemble TSM’s market value.

As you can see these stocks had an average of 81.25 hedge funds with bullish positions and the average amount invested in these stocks was $7.19 billion. That figure was $1.29 billion in TSM’s case. Allergan, Inc. (NYSE:AGN) is the most popular stock in this table. On the other hand Altria Group Inc (NYSE:MO) is the least popular one with only 41 bullish hedge fund positions. Compared to these stocks, Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) is even less popular than MO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is required.