Tuesday, March 21, 2006
US-traded Asian stocks look cheap
There was a brilliant article in the recent Investor's Chronicle covering ADRs, American Depository Receipts, a mechanism that allows a synthetic replication of a foreign stock to trade on the New York Stock Exchange or the Nasdaq. This is a significant positive as trading on some foreign exchanges can be very expensive - a US listing allows investors to access these companies in a big, transparent and liquid market cost-efficiently.
Interest was piqued by the numbers for three of the large Taiwanese chip manufacturers. It appears, at first glance, that these shares are trading at a substantial discount to whereabouts I'd expect a UK-listed share to be trading.
three Taiwanese companies still stand out as exceptional value ... Taiwan SemiConductor Manufacturing (TSMC), SiliconWare and ChipMOS.
Taiwan Semiconductor acts as a specialist manufacturing outsourcing contractor to most of the world’s giant electronics companies ... So EPS growth next year should top 22 per cent, putting it on a forward PE ratio of just 13.8 – not bad for a company that has net operating margins of 32.8 per cent.
Siliconware Precision Industries is much smaller – its market cap is $3.2bn – which provides semiconductor packaging and testing services. A preferred supplier for Intel, Siliconware’s products are commonly used in PCs, cell phones, digital cameras and cable modems. It’s among the top five specialist vendors in the world, though well behind industry leaders such as Amkor and ASE. Still, it’s forward PE ratio is below 10, which seems a little miserly considering the 20 per cent growth in earnings every year expected by analysts over the next few years.
ChipMOS ... Earnings next year are expected to race ahead by 73 per cent and analysts reckon that its five-year EPS growth rate should be around 25 per cent. So, with its PE ratio likely to hit just 13.5 in 2006, ChipMOS is one of the cheapest, fastest-growing stocks in the industry, although its net margins are among the lowest, at just 4.2 per cent.
Of the three Silicon Precistion Industries looks the outstanding candidate but with these growth businesses trading on such low PEs for the growth rates expecteds all are worthy of further investigation. My challenge now is to get access to the real-time price and news sources that I enjoy for UK-stocks (MoneyAM and Investegate) for the US-listed Taiwanese.
If that didn't whet your appetite, there's more to the IC's article. Chinese telecoms firms look very cheap too.
That can be your homework for today, post back with comments on these Chinese titans: China Mobile, China Telecom and China Unicom.
The Artful Dodger
Interest was piqued by the numbers for three of the large Taiwanese chip manufacturers. It appears, at first glance, that these shares are trading at a substantial discount to whereabouts I'd expect a UK-listed share to be trading.
three Taiwanese companies still stand out as exceptional value ... Taiwan SemiConductor Manufacturing (TSMC), SiliconWare and ChipMOS.
Taiwan Semiconductor acts as a specialist manufacturing outsourcing contractor to most of the world’s giant electronics companies ... So EPS growth next year should top 22 per cent, putting it on a forward PE ratio of just 13.8 – not bad for a company that has net operating margins of 32.8 per cent.
Siliconware Precision Industries is much smaller – its market cap is $3.2bn – which provides semiconductor packaging and testing services. A preferred supplier for Intel, Siliconware’s products are commonly used in PCs, cell phones, digital cameras and cable modems. It’s among the top five specialist vendors in the world, though well behind industry leaders such as Amkor and ASE. Still, it’s forward PE ratio is below 10, which seems a little miserly considering the 20 per cent growth in earnings every year expected by analysts over the next few years.
ChipMOS ... Earnings next year are expected to race ahead by 73 per cent and analysts reckon that its five-year EPS growth rate should be around 25 per cent. So, with its PE ratio likely to hit just 13.5 in 2006, ChipMOS is one of the cheapest, fastest-growing stocks in the industry, although its net margins are among the lowest, at just 4.2 per cent.
Of the three Silicon Precistion Industries looks the outstanding candidate but with these growth businesses trading on such low PEs for the growth rates expecteds all are worthy of further investigation. My challenge now is to get access to the real-time price and news sources that I enjoy for UK-stocks (MoneyAM and Investegate) for the US-listed Taiwanese.
If that didn't whet your appetite, there's more to the IC's article. Chinese telecoms firms look very cheap too.
That can be your homework for today, post back with comments on these Chinese titans: China Mobile, China Telecom and China Unicom.
The Artful Dodger
Comments:
Post a Comment
