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Alberto Abaterusso
Alberto Abaterusso
Articles (1701) 

These 3 Large Caps Thrash the S&P 500 Index

Salesforce.com tops the list

April 29, 2019 | About:

These large-cap stocks have had positive margins over the past week, month, year and three years, topping the S&P 500 index in each period. The benchmark for the U.S. stock market has increased 1% over the last week, 3.2% over the last month, 16.7% so far this year, 10.5% over the last year and 42.2% over the last three years through April 26.

These stocks will likely continue heading higher as Wall Street has issued recommendation ratings that range between overweight and buy.

Further, the following stocks have either a low debt-equity ratio or a return on invested capital that outperforms the weighted average cost of capital, as well as a high GuruFocus profitability and growth rating.

Salesforce.com Inc. (NYSE:CRM) has increased 6.4% over the last week, 4.8% over the past month, 21.2% so far this year, 38% over the last 52 weeks and 119% over the last three years.

The company doesn’t pay a dividend.

The San Francisco-based developer of enterprise cloud computing solutions has a financial strength rating of 7 out of 10 and a profitability and growth rating of 7 out of 10. The company has a debt-equity ratio of 20% versus an industry median of 27%.

The stock closed at $165.96 per share on Friday for a market capitalization of $127.92 billion. According to GuruFocus, the stock has a price-earnings ratio of 115.25, a price-book ratio of 8.14 and a price-sales ratio of 9.68.

The Peter Lynch chart suggests the stock may be overvalued.

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Wall Street released an average target price of $182.30 per share, or 9.8% higher than the closing share price on Friday, with a buy recommendation rating.

Texas Instruments Inc. (NASDAQ:TXN) has gained 1.5% over the last week, 10.5% over the past month, 24% year to date, 14.3% over the last 52 weeks and 105.5% over the last three years through April 26.

The company has paid dividends since 1972. Currently, Texas Instruments pays a quarterly dividend of 77 cents per share, leading to a forward dividend yield of 2.63% versus the industry median of 2.03% and the S&P 500's yield of 1.87% as of Friday.

Texas Instruments has a financial strength rating of 7 out of 10 and a high profitability and growth rating of 9 out of 10. The return on invested capital of 55.3% tops the weighted average cost of capital of 9% by 4,630 basis points.

The stock was trading around $117.21 per share on Friday for a market capitalization of $110.04 billion. The stock has a price-earnings ratio of 21.27, a price-book ratio of 13.15 and a price-sales ratio of 7.36.

The Peter Lynch chart suggests the stock is not trading cheaply.

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Wall Street issued a price target of $117.04 per share of Texas Instruments with an overweight recommendation rating.

Qualcomm Inc.(NASDAQ:QCOM) has gained 8.5% over the last week, 52% over the past month, 52.2% year to date, 69.5% over the last 12 months and 71.5% over the last three years.

Qualcomm has paid dividends since 2003. Currently, the company pays a quarterly dividend of 62 cents per share, leading to a forward dividend yield of 2.86% versus the industry median of 2.03% and the S&P 500's yield of 1.87%. Yields are as of Friday.

The San Diego, California-based semiconductor company has a 5 out of 10 financial strength rating and a 7 out of 10 profitability and growth rating. The return on invested capital of 32.33% outperforms the weighted average cost of capital of 4.1% by 2,823 basis points.

Shares of Qualcomm were trading around $86.64 per share on Friday for a market capitalization of $104.86 billion. The stock has a price-earnings ratio of 54.84, a price-book ratio of 28.99 and a price-sales ratio of 5.65.

According to the Peter Lynch chart, the stock may be overpriced.

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Wall Street issued an average target price of $82.30 per share and an overweight recommendation rating.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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