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.
ON Semiconductor Corp
The first company that meets the criteria is ON Semiconductor Corp. (ON, Financial), a Phoenix, Arizona-based manufacturer of semiconductors with operations worldwide.
ON Semiconductor Corp.'s business has a four-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 9.80% and its Ebitda per share increase by 20.60% on average every year over the past decade.
The stock price was $53.47 at the close of regular trading on Friday, determining a market cap currently at $23.23 billion.
GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 9 out of 10 to the company.
The price-earnings ratio is 16.39 versus the industry median of 17.05, the enterprise value-to-Ebitda ratio is 10.36 versus the industry median of 10.7 and the price-sales ratio is 3.31 versus the industry median of 2.2.
Wall Street sell-side analysts issued a median recommendation rating of overweight for this stock and have established an average target price of about $71.28 per share.
Applied Materials Inc.
The third company that meets the criteria is Applied Materials Inc. (AMAT, Financial), a Santa Clara, California-based supplier of manufacturing equipment, services and software to semiconductor producers.
Applied Materials Inc.’s business has a three-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 14.30% and its Ebitda per share increase by 24.10% on average every year over the past decade.
The stock price was $91.19 at the end of regular trading Friday, determing a market cap that is currently around $24.21 billion.
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 12.18 versus the industry median of 17.05, the enterprise value-to-Ebitda ratio is 9.66 versus the industry median of 10.68 and the price-sales ratio is 3.3 versus the industry median of 2.18.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock with an average target price of $140.93 per share.
Microchip Technology Inc.
The fourth company that meets the criteria is Microchip Technology Inc. (MCHP, Financial), a Chandler, Arizona-based global manufacturer of semiconductors.
Microchip Technology Inc.’s business has a 3.5-star business predictability rank from GuruFocus. The company saw its revenue per share increase by 14.40% and its Ebitda per share increase by 16.40% on average every year over the past decade.
The stock price was $59.45 at the close of regular trading on Friday for a market cap of $32.97 billion.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 10 out of 10 to the company.
The price-earnings ratio is 26.27 versus the industry median of 17.05, the enterprise value-to-Ebitda ratio is 14.06 versus the industry median of 10.68 and the price-sales ratio is 4.92 versus the industry median of 2.18.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock with an average target price of $84.44 per share.
