Bonsai Partners recently released its Q1 2021 Investor Letter, a copy of which you can download here. The fund posted a return of -0.8% for the quarter (net of fees), underperforming their benchmark, the S&P 500 Index which returned 6.2% in the same quarter. You should check out Bonsai Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the Q1 2021 Investor Letter, the fund highlighted a few stocks and Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) is one of them. Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) is a semiconductor company. In the last three months, Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) stock lost 7%. 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.”
In Q4 2020, the number of bullish hedge fund positions on Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in TSM’s growth potential. Our calculations showed that Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage:
Disclosure: None. This article is originally published at Insider Monkey.