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4 Stock Picks for a Long-Term Investment Approach

These companies have consistently increased sales and Ebitda

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May 18, 2022
Summary
  • Apple, Nvidia, Sirius XM Holdings and Costco have highly predictable businesses.
  • They have grown revenue and Ebitda steadily over the past several years, resulting in strong share price performances.
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The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue per share and Ebitda per share (or book value per share in the case of financial stocks) have been growing steadily and who have produced a strong long-term performance of their stock prices.

Thus, those following a long-term investment strategy could find attractive investing opportunities by screening the market for stocks that have a high GuruFocus business predictability rating. The following stocks all trade with high business predictability ratings and are recommended by Wall Street.

Apple

The first company that meets the criteria is Apple Inc. (

AAPL, Financial), a Cupertino, California-based manufacturer of smartphones, personal computers, tablets, wearables and accessories worldwide.

Apple's business has a five-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 15.30% and its Ebitda per share increase by 14.10% on average every year over the past decade.

The share price ($145.9 as of early trading on Wednesday) has grown astonishingly over the past 10 years, determining a market capitalization of $2.36 trillion.

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GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 10 out of 10 to the company.

The price-earnings ratio is 23.7 versus the industry median of 18.08, the enterprise value-to-Ebitda ratio is 18.29 versus the industry median of 10.23 and the price-sales ratio is 6.27 versus the industry median of 1.28.

Wall Street sell-side analysts issued a median recommendation rating of overweight for this stock and have established an average target price of about $189.03 per share.

Nvidia

The second company that meets the criteria is Nvidia Corp. (

NVDA, Financial), a Santa Clara, California-based producer of graphics processing units and system-on-chip units for the consumer electronics, computer hardware, semiconductor and video game industries.

Nvidia's business has a 3.5-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 19.70% and its Ebitda per share increase by 29.30% on average every year over the past decade.

The current stock price ($180.2 per share as of early trading on Wednesday) has grown like crazy over the past 10 years to a market capitalization of $447.82 billion.

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GuruFocus assigned a financial strength rating of 8 out of 10 and a profitability rating of 10 out of 10 to the company.

The price-earnings ratio is 46.63 versus the industry median of 19.11, the enterprise value-to-Ebitda ratio is 38.72 versus the industry median of 12.03 and the price-sales ratio is 16.91 versus the industry median of 2.47.

Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock with an average target price of $322.31 per share.

Sirius XM Holdings

The third company that meets the criteria is Sirius XM Holdings Inc. (

SIRI, Financial), a New York-based provider of satellite radio services in the U.S.

Sirius XM’s business has a four-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 17.10% and its Ebitda per share increase by 14.10% on average every year over the past decade.

The current share price ($6.2 as of early trading on Wednesday) has increased significantly over the past 10 years, determining a market capitalization of $24.21 billion.

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GuruFocus assigned a financial strength rating of 3 out of 10 and a profitability rating of 10 out of 10 to the company.

The price-earnings ratio is 18.08 versus the industry median of 16.94, the enterprise value-to-Ebitda ratio is 12.37 versus the industry median of 8.72 and the price-sales ratio is 2.85 versus the industry median of 1.45.

Wall Street sell-side analysts issued a median recommendation rating of hold for the stock with an average target price of $7.17 per share.

Costco

The fourth company that meets the criteria is Costco Wholesale Corp. (

COST, Financial), an Issaquah, Washington-based operator of warehouse discount stores located in the U.S. and internationally.

Costco’s business has a 4.5-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 7.20% and its Ebitda per share increase by 8.90% on average every year over the past decade.

The current share price ($439 as of early trading on Wednesday) has increased significantly over the past 10 years, determining a market capitalization of $195.33 billion.

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GuruFocus assigned a financial strength rating of 8 out of 10 and a profitability rating of 9 out of 10 to the company.

The price-earnings ratio is 35.51 versus the industry median of 16.25, the enterprise value-to-Ebitda ratio is 20.45 versus the industry median of 9.38 and the price-sales ratio is 0.94 versus the industry median of 0.5.

Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock with an average target price of $601.12 per share.

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I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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