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Today, Jim Lebenthal and Stephen Weiss, Founder, Short Hills Capital Partners commented about whether TSM, BRK.B, BABA, AAPL, ONON, ADBE, C are stocks to buy or sell.
A great investor and great human being. His main claim to fame is using coming sense when making deals. He expects the new managers to do a fabulous job, but they can't live up to Buffet and Munger. The stock has a lot of cash to make interesting acquisitions. He would own companies that BRK owns.
The biggest risk is a Chinese invasion, but he owns Alibaba which operates in China. TSM is growing cash flow as EBITDA, revenues and operating income all are growing at 20% while EBITDA multiple is 11-12x (much lower than Nvidia) and PE is 20x. Earnings are much more predictable than Nvidia's. It's his largest position.
You must give tremendous credit to the work that Warren Buffet and his team have done this year. He's setting the team that replaces him with flexibility; they have over $300 billion in cash, have no concentration risk and are in a great position if there is a serious market decline in the coming year or so.
Their playbook is to sit and watch a new product in the market, then see if they can perfect it without spending too much capex. This is what is happening with AI. Apple, Alphabet and more recently Amazon have momentum among the Mag 7. He expects a strong 2026 for Apple when they reveal their AI plans.
It's had a good year, long overdue, up 66% this year. By far is the cheapest among peers in PE, book value and dividend yield. Cheaper because profitability is less, however, the CEO is increased profits steadily in recent years and close the gap with peers.