We recently published a list of the 10 best stocks to buy and hold for five years. In this article, we’ll take a look at how Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) stands compared to other stocks that are best to buy and hold for five years.
On Nov. 7, Reuters reported that U.S. stocks rose more than usual after the Federal Reserve announced a 25 basis point interest rate cut, with gains fueled by the election results and extending gains. The Fed’s decision came just after the job market showed signs of easing and inflation moved toward the central bank’s 2% target. Most investors expected the new administration to ease taxes and regulations, all of which helped lift all three major indexes. The S&P 500 and Dow each posted their biggest one-day gains in two years.
Now that the election is over, investors want to know how the market will perform amid the election results. On November 8, Vanity Fair contributing editor Bethany McLean joined Yahoo Finance’s Catalyst to discuss why businesses are feeling optimistic as a new president takes the White House.
MacLean emphasizes that investors foresee a myriad of benefits, including extended tax cuts, reduced regulation, and less antitrust scrutiny, all of which are driving the market’s surge. Despite the potential benefits, she stresses that it’s difficult to predict what the administration will do at this point.
MacLean hopes the new administration will be friendlier to technology companies, but remains determined to see how policy develops. He added that he expects a “reversal” if future policies by the new administration have a negative impact on the stock market.
On the other hand, some analysts argue that the easing cycle has a bigger impact on the stock market than the election, suggesting that the name of value may be more important at this point. On November 7, Arup Datta, Senior Vice President at Mackenzie Global Quantitative, joined Wealth. He will be sharing his market theory on Yahoo Finance as the 2024 election approaches.
Dutta shares that he is very positive about the market, but emphasizes that this victory will have little impact on financial markets in the long run. Speaking about the great 7 companies, he added that focusing on quality stocks with positive growth and value in your investment portfolio will help you navigate the market in these situations.
He hinted that the great seven have been the talk of the town for the past 18 to 21 months, but he wants to “switch things around” a bit. Historically, value stocks have performed better during easing cycles, Dutta added.
the story continues
Near-term markets are likely to remain volatile as the new administration settles in and the Fed begins its second rate cut of the cycle. Looking to the future, several companies are promising long-term growth with their own innovative technologies and significant investments. That being said, let’s take a look at the 10 best stocks to buy and hold for five years.
our methodology
To come up with the 10 best stocks to buy and hold for five years, we looked at multiple similar rankings to create an initial list of 20 stocks. We then ranked the top 10 based on hedge fund sentiment at the end of Q2 2024.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Is Taiwan Semiconductor (TSM) the best stock to buy and hold for 5 years?
Close-up of a complex network of integrated circuits used in logic semiconductors.
Number of hedge fund holders: 156
Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is one of the best stocks to buy and hold for five years. The semiconductor company makes chips for tech giants like NVIDIA and AMD.
In the third quarter of 2024, Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) recorded a net profit worth NT$23.7 billion (NT$759.69 billion), an increase of 39% and 54.2% year-on-year. % increased. Each year. The company expects fourth-quarter sales to be in the range of $26.1 billion to $26.9 billion. TSM attributes the revenue increase to increased demand for artificial intelligence and its 3nm and 5nm technologies.
TMSC expects to spend $40 billion to $32 billion in capital expenditures in 2024, allocated to advanced process technologies, specialty technologies, and advanced packaging and testing. Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is expanding its presence around the world. The company recently formed a joint venture with key partners in Dresden, Germany, positioning TMSC as a leader in the foundry industry. Most recently, the company expanded its partnership with Amkor to advance advanced packaging in Arizona and foster the region’s semiconductor ecosystem.
Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) expects its revenue from AI chips to grow at a compound annual growth rate (CAGR) of 50% by 2027, which earns it a spot on our list. Contribute to
Diamond Hill Capital said the following about Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) in its Q2 2024 investor letter:
“On an individual holding basis, stocks with the highest returns in the second quarter included long positions in Alphabet, Taiwan Semiconductor Manufacturing Company (NYSE:TSM), and Microsoft. Fundamentals for Taiwan Semiconductor Corporation (TSMC) remain strong as demand for the company’s chips continues to grow, especially as trends in machine learning and cloud computing gain further momentum.
Overall, TSM ranks #4 on our list of the best stocks to buy and hold for five years. While we see TSM’s growth potential, we believe certain AI stocks are more likely to deliver higher returns in a shorter time frame. If you’re looking for AI stocks with more promise than TSM, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks, According to BlackRock
Disclosure: None. This article was originally published on Insider Monkey.
