When in search of value opportunities, investors may want to consider the following stocks, as they represent 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.
Additionally, sell-side analysts on Wall Street have issued positive ratings for them.
United Microelectronics
The first stock that makes the cut is United Microelectronics Corp. (UMC, Financial), a Taiwanese semiconductor wafer foundry operator with sales primarily in the U.S., Europe, Taiwan and other Asian countries.
GuruFocus rated its financial strength 7 out of 10, driven by a Piotroski F-Score of 7, which indicates the company benefits from a healthy financial situation, and an Altman Z-Score of 3.87, suggesting it is in good standing. These two metrics imply low risk that the company could fail within two years.
GuruFocus rated its profitability 7 out of 10, driven by a net profit margin of 19.31% versus the industry median of 7.23%.
The share price ($11.4 as of Aug. 31) has risen by 212.4% over the past year for a market capitalization of $28.01 billion, a price-earnings ratio of 21.1 and a price-book ratio of 3.2.
The price-sales ratio is 4.05 and the 52-week range is $3.425 to $11.71.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $12.74 per share.
Yandex
The second stock that qualifies is Yandex NV (YNDX, Financial), a Netherlands-based internet search engine provider for Russia and several other countries. The company offers a wide range of services online, including geolocation services, a video conferencing and correspondence service, online news aggregation, advertising network and e-commerce.
GuruFocus rated its financial strength 6 out of 10, driven by an Altman Z-Score of 6.94, which indicates the company is in the safe zone regarding its financial situation.
GuruFocus rated its profitability 9 out of 10, driven by a three-year revenue growth rate of 18.9% versus the industry median of 6.4% and three-year earnings per share without non-recurring items growth rate of 26.1% versus the industry median of 16.4%.
The share price ($76.9 as of Aug. 31) has risen by 13.8% over the past year for a market capitalization of $27.48 billion, a price-earnings ratio of 141.1 and a price-book ratio of 6.14.
The price-sales ratio is 7.37 and the 52-week range is $55.6203 to $77.05.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of approximately $85.5 per share.
Monolithic Power Systems
The third stock that meets the criteria is Monolithic Power Systems Inc. (MPWR, Financial), a Kirkland, Washington-based semiconductors company serving several markets in the U.S. and globally, including communications and consumer applications markets as well as automotive, computing and storage and industrial.
GuruFocus rated its financial strength 7 out of 10, driven by a cash-to-debt of 120.77 versus the industry median of 1.77 and an Altman Z-Score of 50.04. These two indicators point to a stable financial situation, leading to a low likelihood for the company to go bankrupt within two years.
The company's profitability scored a 9 out of 10 rating, driven by a return on capital ratio of 56.1% versus the industry median of 14.74% and a three-year revenue growth rate of 18.5% versus the industry median of 1.35%.
The share price ($494.93 as of Aug. 31) has risen by 75% over the past year for a market capitalization of $22.73 billion, a price-earnings ratio of 118.12 and a price-book ratio of 20.9.
The price-sales ratio is 22.6 and the 52-week range is $235.62 to $504.545.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $473.88 per share.
