In light of the Federal Reserve's announcement that it will pause interest rate hikes through 2023, investors may want to have a look at these four good companies that have strong Piotroski F-scores according to the All-in-One Screener, a Premium feature of GuruFocus: The Home Depot Inc. (HD, Financial), IDEXX Laboratories Inc. (IDXX, Financial), Moody's Corporation (MCO, Financial) and Usana Health Sciences Inc. (USNA, Financial).
Dow surges on Fed keeping rates constant and upgrading economic outlook
On Wednesday, the Federal Open Market Committee said in a post-meeting statement that economic activity and employment indicators "have turned up recently" and that inflation remains near 2%. The committee also voted to keep short-term borrowing rates near zero.
The U.S. stock market received a St. Patrick's Day boost on the heels of the Fed's upbeat economic outlook and announcement it will pause interest rate hikes to at least 2023. The Dow Jones Industrial Average closed at 33,015.37, topping 33,000 for the first time in history and up 189.42 points from Tuesday's close of 32,825.95.
As such, investors may find opportunities in companies that have shown profitability over the past 10 years and have a Piotroski F-score of at least 7 out of 9. Piotroski developed a nine-point criterion that grades a company's business operations. The accounting professor's research suggests that companies with high F-scores have high return potential than companies with low F-scores.
Home Depot
Home Depot (HD, Financial) scores a Piotroski F-score of 7, driven by good quality of earnings, a lower leverage ratio this year compared to last year and a higher current ratio this year compared to last year.
GuruFocus ranks the Atlanta-based home furnishings retailer's profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased approximately 0.7% per year on average over the past five years and is outperforming over 90% of global competitors.
Gurus with large holdings in Home Depot include Ken Fisher (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio).
IDEXX Laboratories
Westbrook, Maine-based IDEXX Laboratories (IDXX, Financial) develops, manufactures and distributes diagnostic products, equipment and services for pets and livestock. GuruFocus ranks the company's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a five-star business predictability rank and an operating margin that has increased approximately 5.7% per year on average over the past five years and is outperforming approximately 85% of global competitors.
Moody's Corporation
Moody's Corporation (MCO, Financial), a New York-based credit rating provider, scored a perfect Piotroski F-score of 9.
GuruFocus ranks the company's profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank, an operating margin near a 10-year high of 45.56% and a return on assets that outperforms over 91% of global competitors.
Usana Health Services
Usana Health Services (USNA, Financial) develops, manufactures and sells science-based nutritional and personal-care products. GuruFocus ranks the company's financial strength and profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, an operating margin that has increased approximately 0.8% per year on average over the past 10 years and interest coverage and debt ratios that outperform over 91% of global competitors.
Disclosure: Long Usana Health Sciences.
Read more here:
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- 4 Profitable and Predictable Companies With High Free Cash Flow Growth
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