According to the “High Quality” screener, one of several predefined screens under the All-in-One Screener, four semiconductor companies with strong growth potential are Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM), Texas Instruments Inc. (NASDAQ:TXN), Skyworks Solutions Inc. (NASDAQ:SWKS) and Intel Corp. (NASDAQ:INTC).
Dow trades higher on improving U.S.-China trade talks
On Thursday, the Dow Jones Industrial Average closed at 26,384.63, up approximately 166.5 points from Wednesday’s close of 26,218.13 on improving trade negotiations between the U.S. and China.
CNBC columnist Fred Imbert said the Wall Street Journal reported President Trump expects to announce the date of a trade summit with Chinese President Xi Jinping later on Thursday.
“Bottoming narrative” in China propels semiconductor industry
CNBC’s “Squawk on the Street” anchors said strong economic data from China supports the “bull narrative” regarding earnings growth stability despite poor economic data from the U.S. and Europe. Columnist Huiling Tan said on Monday that manufacturing in China “expanded unexpectedly in March at its fastest pace in eight months”: the Caixin Manufacturing purchasing manager’s index level of 50.8 outperformed the analyst estimate of 49.9. Such market data boosted gains among semiconductor companies like Nvidia Corp. (NASDAQ:NVDA), Lam Research Corp. (NASDAQ:LRCX) and major David Tepper (Trades, Portfolio) holding Micron Technology Inc. (NASDAQ:MU).
Taiwan Semiconductor engages in the manufacturing, packaging and computer-aided designing of integrated circuits and other semiconductor devices. GuruFocus ranks the company’s financial strength and profitability 8 out of 10 on several positive signs, which include expanding profit margins, a robust Altman Z-score of 11.69 and a return on equity that outperforms 88% of global competitors. Additionally, Taiwan Semiconductor’s business predictability ranks five stars out of five on strong and consistent revenue and earnings growth over the past 10 years.