Bonsai Partners recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 247% for the quarter (net of fees), outperforming their benchmark, the S&P 500 Index which returned 18.4% 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 Q4 2020 Investor Letter, Bonsai Partners 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 manufacturing company. In the last three months, Taiwan Semiconductor Mfg Co Ltd (NYSE:TSM) stock gained 41% and on February 12th it had a closing price of $138.06. Here is what Bonsai Partners said:
“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 34.5% during the quarter. Taiwan Semiconductor continues to see unprecedented demand, albeit at a slightly less rapid growth rate than earlier in 2020. At the time of writing, TSMC announced strong fourth-quarter results and staggering growth in their expected capital expenditures for 2021 – growing from $17B in 2020 to $25B to $28B in 2021. Forward-looking capital expenditures are the key leading indicator of their medium-term growth rate expectations, and I expect TSMC management will continue to earn excellent returns on these colossal investments.
TSMC’s capital expenditure growth is likely due to investment in their new U.S. manufacturing footprint, rapid investment in their cutting edge process technology, as well as generally high levels of customer demand. Lately, we’ve seen semiconductor shortages in some of their less advanced process technologies, emphasizing the current state of the semiconductor supply-demand imbalance.”
Bonsai Partners has been a long time Taiwan Semiconductor Mfg Co Ltd (NYSE:TSM) bull. In August 2020, we shared Bonsai Partners’s bullish TSM’s thesis in this article.
In Q3 2020, the number of bullish hedge fund positions on Taiwan Semiconductor Mfg Co Ltd (NYSE:TSM) stock increased by about 16% 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 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website:
Disclosure: None. This article is originally published at Insider Monkey.
