Tower Semiconductor Ltd
TSEMAbove valueExpectations · demandingHeld by 2 superinvestors.
SEC 10-K · fundamentals
Business quality
As of 2025-12-31- Revenue growth
- +9.1%
- Net margin
- 14.1%
- ROE
- 7.6%
- FCF margin
- -3.1%
Valuation · value band
Above fair value
Zero-growth floor
$28
Central IV
$20
Optimistic top
$28
Tower Semiconductor Ltd (TSEM): A conservative value band $28 / sh (zero-growth floor to growth-capped optimistic top); central read about $20. Today’s price sits above that band (price $168 as of 2026-10-22).
The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.
Revenue growth 2% (lower of historical trend and fundamental cap, capped by moat) · moat 0 yr · discount 10.8% · Zero-growth downside $28
Price as of 2026-10-22 · yahoo · DGS10 5.1% @ 2026-10-21.
Method & numbers
Model cautions
- Owner-earnings yield diverges sharply from the 10-year Treasury (over 300 bps).
A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.
Owner-earnings DCF $15.15 – $22.73 · Greenwald zero-growth $27.81 · zero-growth base $27.81 · reproduction $27.81
Moat Below asset base · terminal value 43% of present value · owner-earnings yield 1% vs 10Y 5.1%.
Graham earnings-power value (normalized NOPAT)$15.13 – $18.34 / sh
Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.
Years: 2025, 2024, 2023, 2022, 2021
v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 64% (> 50%); estimate is degraded. Share-based compensation is left as a real expense (not added back). Operating margin is below its multi-year average (cyclical/declining): normalized margin capped at the latest year — no peak-margin capitalization (audit #2).
Buffett owner-earnings value$15.65 – $19.12 / sh
Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 9–11% rate band (read as a cost-of-equity proxy). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).
Years: 2025, 2024, 2023, 2022, 2021
v1 simplifications: Net income is below its multi-year average (cyclical/declining): normalized owner earnings anchored to the latest year — no peak-earnings capitalization (audit #2). Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 64% (> 50%); estimate is degraded. One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% band as a cost-of-equity proxy; no leverage premium applied (net cash or debt within the no-charge range).
Reproduction value = tangible net assets $2.91B + capitalized R&D $248.57M（FY 2025, 2024, 2023, 2022, 2021） = $27.81 / sh. Reproduction value = tangible net assets (equity − goodwill − intangibles) + capitalized R&D (5y straight-line), ÷ diluted shares.
Moat reading: Franchise test compares earnings power (EPV) against reproduction value on both AV_conservative (tangible + capitalized R&D) and AV_reproduction (conservative + acquired-reset proxy). Both must clear the franchise multiple for a moat signal; near it, a commodity; below it, value destruction. A directional reading, not a verdict.
Growth value gated to zero — no moat or ROIIC ≤ WACC, so no growth value is credited.
Window FY 2025, 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 7% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.
Owner-earnings DCF: growth g₁ 2% · OE FY 2025, 2024, 2023, 2022, 2021 · Discount band: 9.63%–12.00% (DGS10 +4.5% to a 12% strict end, as of 2026-10-21). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp.
What the price is betting
Today's price pencils in about over 30.0% (outside the usual range) a year in owner-earnings for the next few years. Revenue actually grew 2.2% a year.
The market wants it well ahead of its own track record.
SEC 13F · holders
Superinvestors Holding This Security
2 holders · $2.8M combined · this quarter +1 opened / -0 exited
- Value$2.1MWeight (prev→now)0.4% → 0.0% ▼
- Value$693,042Weight (prev→now)New · 0.0%
SEC 13F · notes
Written summary
Written summary
Tower Semiconductor Ltd (TSEM) is held by 2 of the superinvestors tracked on Compounder, with a combined $2.8M in reported 13F value. The largest position belongs to Ray Dalio, where it makes up 0.0% of the portfolio.
Other notable holders by value include Lee Ainslie (0.0% of its book).
In the quarter ended 2026-06-30, 1 of the tracked filers opened a new position in TSEM, 0 added to existing ones, 1 trimmed, and 0 sold out entirely.
Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.
SEC 13F · co-ownership
Also held by these investors
Investors holding Tower Semiconductor Ltd (TSEM) also commonly hold →
- Nvidia CorpNVDA2 holders
- Amazon.Com IncAMZN2 holders
- Advanced Micro DevicesAMD2 holders
- Microsoft CorpMSFT2 holders
- Alphabet Inc-Cl CGOOG2 holders
- Intel CorpINTC2 holders
TSEM's price is not below its conservative value band. See current strike-zone stocks
Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-14· Yahoo Finance as of 2026-10-22· SEC 20-F (XBRL) as of 2025-12-31 · filed 2026-04-30·FRED 10-year Treasury (DGS10) as of 2026-10-21
Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.
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