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What are we looking for?

U.S. stocks with attractive invested capital returns, momentum and quality factor ratings.

With U.S. stock indexes consistently reaching record levels, we conducted a screening process to pinpoint standout opportunities in the U.S. equity market. Despite the general rise benefiting most stocks, our goal is to identify potential opportunities that might differ from the mainstream. We’re specifically looking at stocks where the underlying fundamentals may tell a unique story.

The screen

We used Trading Central Strategy Builder to search for U.S.-listed equities with impressive profitability ratios and capital management.

We begin by setting a minimum market capitalization threshold of US$5-billion to focus on larger, more established companies.

Next we screened for companies that are indicating a return on capital (ROC) and return on investment (ROI) of at least 20 per cent. ROC serves as an indicator of a company’s proficiency in generating profits from its core operations, providing insights into operational efficiency. Simultaneously, ROI offers a comprehensive view, revealing the overall profitability derived from all invested capital, encompassing both equity and debt. Robust ROC and ROI figures typically suggest effective capital management and financial success.

Finally, we screened for the top-rated stocks using the TC Quality Factor rating methodology developed by Trading Central’s experts in quantitative analysis. The quality factor group measures the total financial strength of a company with regard to profitability, the robustness of its balance sheet and earnings quality. We set a minimum requirement of 70 out of 100.

We have also included year-to-date, P/E and one-year price performance for your reference.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities. Strategy Builder, our stock screener, is available through leading retail brokers in Canada and worldwide.

What we found

Standout U.S. stock performers

RANK COMPANYTICKERINDUSTRYMKT.CAP. ($Bil) RECENT PRICE ($)RETN.CPTL (%)RETN.INVMT (%)TC QLT.FCTR.RTNGP/EYTD PERF. (%)1Y PERF. (%)
1NVIDIA CorpNVDA-QSemiconductors1515626.1647.8245.279080.9723.9217.6
2Applied Materials IncAMAT-QSemiconductors144.76176.6633.6931.447521.487.552.9
3Rambus IncRMBS-QSemiconductors7.8974.2732.1430.4982287.570
4Deckers Outdoor CorpDECK-NManufacturing - Apparel & Accessories19.31762.0931.3434.128432.4512.378.5
5KLA CorpKLAC-QSemiconductors86.84653.4338.2334.937028.579.951.2
6Eagle Materials IncEXP-NBuilding Materials7.24210.1421.9520.498115.182.343.3
7Williams-Sonoma IncWSM-NRetail - Cyclical13.32208.9431.4252.417014.472.967
8Apple IncAAPL-QHardware3007195.6156.4961.618531.73137.1
9Cadence Design Systems IncCDNS-QSoftware80.21296.9427.1225.4585848.261.6
10Marriott International IncMAR-QTravel & Leisure69.83242.8628.0228.487925.225.438
11W.W. Grainger IncGWW-NIndustrial Distribution43.2488034.9533.987024.35.155.6
12Fastenal CoFAST-QIndustrial Distribution39.3869.3828.6731.57334.086.339.2
13Alphabet IncGOOGL-QInteractive Media1870152.3821.9223.418028.496.556.2
14Microsoft CorpMSFT-QSoftware2991406.6928.1229.47339767.3
15Visa IncV-NCredit Services558.29271.6630.9729.188232.814.320.8
16Autodesk IncADSK-QSoftware54.05253.622.7224.367859.593.824.8
17MasterCard IncMA-NCredit Services411.4438.1253.2253.219038.252.914.7
18Illinois Tool Works IncITW-NIndustrial Products77.81261.8630.8132.047725.11-1.313.2
19Check Point Software Technologies LtdCHKP-QSoftware18.41158.0127.2130.928621.97322.5
20TJX Companies IncTJX-NRetail - Cyclical108.2195.2621.2842.397526.821.214.9

Source: Trading Central

Topping our list is Nvidia Corp. NVDA-Q, a leading designer of graphics processors. The stock has the highest YTD and one-year price return on our list at 23.9 per cent and 217.6 per cent and continues to trend higher. The stock has a quality factor rating of 90 out of 100, which is the highest on our list and tied with Mastercard. Moreover, both ROC and ROI metrics rank among the highest on our list, reaching 47.82 per cent and 45.27 per cent respectively.

Apple Inc. AAPL-Q, which has the highest market cap on our list, at US$3-trillion, also takes the lead in terms of financial performance. The tech giant showcases the highest ROC and ROI figures on our list, standing at an impressive 56.49 per cent and 61.61 per cent, respectively, underscoring its robust profitability and efficient capital utilization.

Beyond the notable surges in technology stocks, Deckers Outdoor Corp DECK-N, known for producing popular footwear brands such as Teva and Hoka, stands out with the second-highest YTD price performance on our list at 12.3 per cent. Additionally, the company demonstrates robust financial performance, with a solid ROC of 31.34 per cent and a commendable ROI of 34.12 per cent.

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central with respect to investment in financial instruments. Investors should conduct further research before investing.

Gary Christie is head of North American research at Trading Central in Ottawa.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 22/04/24 3:00pm EDT.

SymbolName% changeLast
NVDA-Q
Nvidia Corp
+4.66%797.5
AMAT-Q
Applied Materials
+0.3%190.33
RMBS-Q
Rambus Inc
+1.12%55.29
DECK-N
Deckers Outdoor Corp
+1.73%814.25
KLAC-Q
K L A-Tencor Corp
+1.16%635.45
EXP-N
Eagle Materials Inc
+3.49%246.51
WSM-N
Williams-Sonoma
+0.9%281.71
AAPL-Q
Apple Inc
+1.02%166.69
CDNS-Q
Cadence Design Sys
+1.85%285.44
MAR-Q
Marriot Int Cl A
+1.06%238.51
GWW-N
W.W. Grainger
+0.85%950.62
FAST-Q
Fastenal Company
+0.1%67.64
MSFT-Q
Microsoft Corp
+0.66%401.75
V-N
Visa Inc
+1.12%272.8
ADSK-Q
Autodesk Inc
+0.24%217.03
MA-N
Mastercard Inc
+0.77%458.88
ITW-N
Illinois Tool Works Inc
+0.46%251.6
CHKP-Q
Check Point Software
+1.08%159.65
TJX-N
TJX Companies
+1.19%94.47
GOOGL-Q
Alphabet Cl A
+1.9%157.02

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