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Autodesk and Taiwan Semiconductor Mfg.


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RECAP OF LAST WEEK AND RESULTS:

Aurinia Pharmaceuticals $13.00: We have recommended this stock multiple times and believe with extreme high conviction that this is going to get bought out for $35-45 a share. An interesting discovery from some detectives on Stocktwits board found that they recently lengthened the blackout period for which insiders cannot trade in the market. This gives us a calculated theory that this was done to facilitate buyout talks. Exciting!

NextEra Energy $78.00: Was at $75.80 upon recommendation. Reached a over $78 share and could continue with the updates on Biden stimulus plan.

IN THIS ISSUE

Autodesk

A 3D modeling software company that has shown to be growing quickly as it has new up take with designers

Taiwan Semiconductor Mfg.

May stand to benefit from hiked prices due to chip shortages world wide, and may hedge against possible inflation.

Autodesk: ADSK

This company produces software for artists, architects, and engineers to produce 3D models and simulations. This allows designers to create blueprints before building their designs. They currently offer many different platforms and being an engineer myself, I would recommend them as a platform to use for any company or freelance engineer. They have created an intelligent customer acquisition technique by allowing students to run the software for free. This company has some of the best and most user friendly software on the market from my personal experience. Some of the competing software are CATIA, SolidWorks and Creo. I see this becoming the leading 3D software company in the future as they have put seeds into the ground by investing in a large student base which when going out into the workforce will want to continue working with their software. They own popular tools such as Tinkercad and Autodesk Fusion 360 which are made for younger students to start thinking and designing. They license their software out to large commercial companies and continuously innovate on what is needed to make quicker and better designs.

An individual professional license for one of their software can cost $2,150 a year! Since the pandemic, many are working from home or starting freelancing jobs. We think this company will thrive in any time as designers are always needed for product design.

We also realize this is an under the radar stock for the new infrastructure bill. When things are being designed and built, 3D modeling is now a must for simulation of structures, roads, and buildings. We could see some Autodesk business picking up from this as well.

Price Forecast

Looking at it rising with the market this week. Watch to see if it breaks $300 a share, it could break out to $305 quickly after. Current Price: $293.43 One Month Target: $300 One Year Target: $320 Two Year Target: $380

This is a put credit spread which allows you to collect premium as long as the price stays above $285 a share.


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Taiwan Semiconductor Mfg.: TSM


“Taiwan Semiconductor Manufacturing Co., Ltd. engages in the manufacture and sale of integrated circuits and wafer semiconductor devices. Its chips are used in personal computers and peripheral products; information applications; wired and wireless communications systems products; automotive and industrial equipment including consumer electronics such as digital video compact disc player, digital television, game consoles, and digital cameras.”

The company has a chance to make it big in this market with a shortage of these devices. TSM will report earnings next week on the 15th premarket. “The company is expected to report EPS of $0.91, up 21.33% from the prior-year quarter.” We will be watching these earnings closely to see how the company is doing. They have been on a pretty decent positive uptrend since 2019 so we will need to see them at least hit the estimated numbers in their 2021 Q1 report.

Price Forecast

We expect this stock to continue to grow over time Current Price: $123.62 One Month Target: $126 One Year Target: $140 Two Year Target: $170

They reported strong numbers for the 4th quarter of 2020. “Year-over-year, fourth quarter revenue increased 14.0% while net income and diluted EPS both increased 23.0%.” They also reported “TSMC today announced consolidated revenue of NT$361.53 billion, net income of NT$142.77 billion, and diluted earnings per share of NT$5.51 (US$0.97 per ADR unit).” They produced some impressive numbers while the world was in a pandemic and we don't expect them to slow down anytime soon.

This stock has moved up more than 140% in the past year and over 370% the past 5 years. It has shown a steady increase over time which gives us reassurance to its stability as a company. They were founded in 1987 and joined the stock market in 1993. The stock also offers a dividend of 1.16%. Which is not a huge deal, but when you can get a stock that has an upside, good history and a dividend it's definitely not a bad purchase. We do see a lot of upside with this stock in the next 5 years. The growth of all things tech will mean a larger demand for the tech that goes in them. TSM can capitalize off of this with smartphones, computers and automotive opportunities.

With relatively low risk, good upside in the future and a good dividend history this stock is a great buy and hold in our opinion.


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All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.

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Until next week,


Brad Mitchell

Colby McCoy

and the Optifinancial Team

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