When in search of value opportunities, investors could be interested in the following three stocks, as they represent equities in companies with high profitability and robust financial conditions. These qualities are represented by GuruFocus profitability and financial strength ratings of at least 6 out of 10.
Furthermore, sell-side analysts on Wall Street have recommended positive ratings for them.
Keysight Technologies Inc
The first stock that makes the cut is Keysight Technologies Inc (KEYS, Financial), a Santa Rosa, California-based manufacturer of electronics tests and measurement equipment as well as electronic design automation software for the aerospace and defense, computer, industrial, semiconductor and telecommunications industries.
GuruFocus rated its financial strength 6 out of 10, driven by a Piotroski F-Score of 8, which tells that the financial situation of the company is very healthy, and an Altman Z-Score of 6.18, which indicate that the balance sheet is in safe zones. The combination of these two financial ratios implies a very low risk that the company could go bankrupt within two years.
GuruFocus rated its profitability 8 out of 10, driven by a return on capital (ROC) ratio of 68.9%, which ranks higher than 91.55% of 2,355 companies in the hardware industry, and by a three-year EPS without NRI growth rate of 80.8%.
The share price ($159.98 as of July 26) has risen by 67.20% over the past year for a market capitalization of $29.47 billion, a price-earnings ratio of 40.1 and a price-book ratio of 8.33.
The price-sales ratio is 6.49 and the 52-week range is $90.62 to $160.86.
On Wall Street, as of July, the stock has a median recommendation rating of overweight and an average target price of $166.46 per share.
SolarEdge Technologies Inc
The second stock that makes the cut is SolarEdge Technologies Inc (SEDG, Financial), an Israeli developer of inverter systems for the solar photovoltaic industry worldwide.
GuruFocus rated its financial strength 6 out of 10, driven by an Altman Z-Score of 7.3, which indicates that the company is in safe zones with regard to its financial condition.
GuruFocus rated its profitability 7 out of 10, driven by a three-year revenue growth rate of 27.4% versus the industry median of 1.4%.
The share price ($245.62 as of July 26 ) has gained 44.02% over the past year for a market capitalization of $12.77 billion, a price-earnings ratio of 101.92 and a price-book ratio of 11.60.
The price-sales ratio is 9.22 and the 52-week range is $162.60 to $377.
On Wall Street, as of July, the stock has a median recommendation rating of overweight and an average target price of $299.73 per share.
Repligen Corporation
The third stock that qualifies is Repligen Corporation (RGEN, Financial), a Waltham, Massachusetts-based developer of bioprocessing technologies and systems that are employed by North American and international biopharmaceuticals in their manufacturing process.
GuruFocus rated its financial strength 7 out of 10, driven by an interest coverage ratio of 7.69 and an Altman Z-Score of 19.12, indicating a stable financial situation leading to a very low likelihood for bankruptcy within two years.
GuruFocus rated the company's profitability 8 out of 10, driven by a return on capital (ROC) ratio of 49.16%, ranking better than 83.54% of 735 competitors, and by a three-year Ebitda growth rate of 43.5%.
The share price ($206.01 as of July 26) has increased by 50.30% over the past year for a market capitalization of $11.31 billion, a price-earnings ratio of 142.08 and a price-book ratio of 7.27.
The price-sales ratio is 26.2 and the 52-week range is $135.23 to $228.83.
On Wall Street, as of July, the stock has a median recommendation rating of buy and an average target price of $240.25 per share.
Disclosure: I have no positions in any securities mentioned.
