5 Tech Stocks to Buy for 2013
Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK ( TheStreet Ratings ) -- TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
TheStreet Ratings model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e. how much one is willing to risk in order to earn profits?; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to its stock's performance.
These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. As always, stock ratings should not be treated as gospel -- rather, use them as a starting point for your own research.
The following pages contain our analysis of 5 out of 50 stocks TheStreet Ratings has identified as being rated a "Buy" heading into the New Year. To view a list of all 50 stocks simply download our FREE report by clicking: HERE
Taiwan Semiconductor Manufacturing (TSM"> TSM) is rated by TheStreet Ratings as a buy with a grade of A+. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, solid stock price performance and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
To view a list of all 50 stocks simply download our FREE report by clicking: HERE
Highlights from the ratings report include:
- TSM's very impressive revenue growth greatly exceeded the industry average of 4.0%. Since the same quarter one year prior, revenues leaped by 65.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 99.9% when compared to the same quarter one year prior, rising from $861.41 million to $1,722.05 million.
- Powered by its strong earnings growth of 94.11% and other important driving factors, this stock has surged by 29.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- TAIWAN SEMICONDUCTOR MFG CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TAIWAN SEMICONDUCTOR MFG CO reported lower earnings of $0.86 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.86).