According to the Model Portfolios, a Premium feature of GuruFocus, five stocks with high GF Scores and high gains year to date are Nvidia Corp. (NVDA, Financial), Monolithic Power Systems Inc. (MPWR, Financial), Cadence Design Systems Inc. (CDNS, Financial), Saia Inc. (SAIA, Financial) and Apple Inc. (AAPL, Financial).
The GuruFocus GF Score is a ranking system that has been found to be closely correlated to the long-term performance of stocks, according to a GuruFocus backtesting study from 2006 to 2021. The study found that stocks with higher GF Score usually generate higher returns than those with lower GF Scores on average.
GuruFocus’ Model Portfolios page appears to support the above observation. As of Friday, March 24, the GF Score Less Than 100 Model Portfolio, which tracks the performance of the top 25 stocks with GF Scores between 91 and 100, has returned 11.8% year to date, which is better than the S&P 500's return of 2.8% over the same period. On the other hand, the model portfolio returns for other GF Score categories are negative for the year to date:
- GF Score Less Than 90 Model Portfolio: Tracks the performance of the top-25 stocks with GF Score between 81 and 90. The portfolio has returned -4.82% in the year to date.
- GF Score Less Than 80 Model Portfolio: Tracks the performance of the top-25 stocks with GF Score between 71 and 80. The portfolio has returned -4.55% in the year to date.
- GF Score Less Than 70 Model Portfolio: Tracks the performance of the top-25 stocks with GF Score between 61 and 70. The portfolio has returned -1.61% in the year to date.
- GF Score Less Than 60 Model Portfolio: Tracks the performance of the top-25 stocks with GF Score between 51 and 60. The portfolio has returned -4.24% in the year to date.
As such, investors may find opportunities in stocks that have a GF Score in the range of 90 through 100. The GF Score considers five key component rankings: financial strength, profitability, GF Value, growth and momentum, with emphasis placed on profitability and growth. Each rank is graded on a scale between 1 to 10, with 10 as the highest score.
Nvidia
Shares of Nvidia (NVDA, Financial) traded around $266.47 on Friday. While the stock is modestly overvalued based on its price-to-GF-Value ratio of 1.10, the stock price has increased approximately 81.65% year to date and 34.7% since the stock was added to the model portfolio on April 28, 2022.
The Santa Clara, California-based graphics processing unit-specialist semiconductor company has a GF Score of 93 out of 100 based on a rank of 10 out of 10 for profitability and growth, a momentum rank of 9 out of 10, a financial strength rank of 7 out of 10 and a GF Value rank of 3 out of 10.
Nvidia's high profitability and growth are driven by several positive investing signs, which include a four-star business predictability rank, a gross profit margin that outperforms approximately 89% of global competitors, and a three-year revenue growth rate that outperforms approximately 90% of global semiconductor companies.
Gurus with holdings in Nvidia include Baillie Gifford (Trades, Portfolio) and Ken Fisher (Trades, Portfolio)’s Fisher Investments.
Monolithic Power Systems
Shares of Monolithic Power Systems (MPWR, Financial) traded around $483.64 on Friday, showing that the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.72. The stock has gained 36.91% year to date and 17.95% since the stock’s April 28, 2022 addition to the model portfolio.
The Kirkland, Washington-based chipmaker has a GF Score of 100 out of 100 based on a rank of 9 out of 10 for GF Value and momentum and a rank of 10 out of 10 for profitability, growth and financial strength.
Monolithic Power Systems’ positive investing signs include a four-star business predictability rank, a high Piotroski F-score of 7 out of 9, no long-term debt and an operating margin that has increased by approximately 10.20% per year on average over the past five years and is outperforming approximately 90% of global competitors.
Gurus with holdings in Monolithic Power Systems include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Jerome Dodson (Trades, Portfolio)’s Parnassus Mid Cap Growth Fund.
Cadence Design Systems
Shares of Cadence Design Systems (CDNS, Financial) traded around $204.90 on Friday. While the stock is modestly overvalued based on its price-to-GF-Value ratio of 1.12, the stock has gained 27.03% year to date and 28.49% since the stock’s additon to the model portfolio on April 28, 2022.
The San Jose, California-based electronic design automation software company has a GF Score of 90 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 8 out of 10, a momentum rank of 6 out of 10 and a GF Value rank of 3 out of 10. While its GF Score must have been 91 or more at some point given its inclusion in the model portfolio, it has since fallen off the mark and so it will need to make up some ground in order to avoid losing its spot in the model portfolio.
Saia
Shares of Saia (SAIA, Financial) traded around $270.72 on Friday, showing that the stock is fairly valued based on its price-to-GF-Value ratio of 1.02. The stock has gained approximately 28.86% year to date.
The Johns Creek, Georgia-based transportation company has a GF Score of 92 out of 100 based on a growth rank of 10 out of 10, a financial strength rank of 8 out of 10, a GF Value rank of 3 out of 10 and a rank of 9 out of 10 for momentum and profitability.
Saia’s high profitability and growth is driven on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 9 out of 9 and three-year revenue and earnings growth rates outperforming more than 78% of global competitors.
Apple
Shares of Apple traded around $160.25 on Friday, showing that the stock is fairly valued based on its price-to-GF-Value ratio of 0.94.
The Cupertino, California-based tech giant has a GF Score of 96 out of 100 based on a rank of 10 out of 10 for profitability and growth, a momentum rank of 8 out of 10, and a rank of 6 out of 10 for GF Value and financial strength.
Apple’s high profitability and growth is driven by several positive investing signs, which include a five-star business predictability rank, a three-year revenue growth rate that outperforms approximately 85% of global competitors and an operating margin that has increased by approximately 2.70% per year on average over the past five years.
Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) owns 895,136,175 shares of Apple, giving the position 38.90% weight in its fourth-quarter 2022 13F equity portfolio. The stock remains Berkshire’s top holding.
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