Taiwan Semiconductor Manufacturing Co TSM shares are moving lower Wednesday after Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) slashed its stake in the chip giant just months after taking on a large position.
What To Know: According to a new 13F filing with the SEC, Warren Buffett's Berkshire cut its stake in Taiwan Semi by 86.2% in the fourth quarter. The firm now has 8.29 million American depositary shares remaining.
The stock sale comes after Berkshire purchased 60 million shares of Taiwan Semi worth $4.6 billion in the third quarter, which represented the firm's largest purchase in the quarter by far.
Despite sliding on the news, Taiwan Semi shares are still up more than 40% off the lows from October.
According to a Bloomberg report, the stock's price-to-earnings ratio fell to 10.3 in October, the lowest levels seen since 2015.
"It’s surprising that Berkshire cut its holding so much in just a quarter, which differs from its past practice of long-term investment and continuing to add shares," Tony Huang, vice president at Taishin Securities Investment Advisory Co, reportedly told Bloomberg.
It may be because Buffett had significant gains on the new buy much sooner than expected. Taiwan semi is currently trading with a price-to-earnings ratio of 15.1, according to Benzinga Pro. On a forward-looking basis the stock is even more expensive, trading at approximately 17.7 times earnings.
See Also: AMD Anticipates Long Term Market Share Gains In Client Computing And Data Center: Analyst
TSM Price Action: Taiwan Semi has a 52-week high of $124.61 and a 52-week low of $59.43.
The stock was down 6.29% at $91.80 at the time of writing, according to Benzinga Pro.
Photo: courtesy of Taiwan Semi.
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