Finding companies with the criteria you want isn’t always easy.  You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash.  An easier way to navigate through this is by using high quality stock screeners.  Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected.  Any company who misses even one of the criteria requirements will be filtered out.

This lets one easily choose ideal metrics.  Screens are effective because they sift out bad stocks and only keep the cream of the crop in.  It isn’t always easy to create an effective screen.  Our Zacks Premium Screens have helped with this, bringing profits to many investors over time.  Our predefined criteria are chosen carefully to capture special kinds of companies.

Today, we’ve dug up three mid-cap stocks using one of our premium screens known as “Mid-Sized Stocks for Outsized Returns”.  Some of the metrics of this screen requires a stock to have an average trading volume of at least 100,000 shares over the last 20 days, a positive EPS surprise last quarter, and a market cap between $1 billion and $10 billion.  Let’s see the stocks which our comprehensive screen has found for us today.

Silicon Motion-(SIMO Quick QuoteSIMO - Free Report)

Silicon Motion focuses on making and marketing universally compatible and low-power semiconductor solutions for the multimedia consumer electronics market.  They develop NAND flash controller ICs for solid-state storage drives and also make specialty RF ICs for mobile devices.  SIMO has earned a “B” for growth, and it also has a PEG of 0.91.  A PEG under 1 may suggest that there is value present. 

Silicon has traits which are desirable for any growth candidate.  For starters, the corporation has consistently posted high gross margin levels.  Over the last few years, gross margin has been in a range close to 50%.  The company’s net margin of 18.29% is impressive, and net income grew by over 36% last year.  Sales grew by about 25% in 2015, and this year is forecasted to see even more growth, with revenues projected to increase by 45.61%.

Analysts have unanimously raised their estimates upwards for the current quarter, current year, and next year over the last two months.  Two analysts revised estimates in the last 60 days, and this has brought the current quarter EPS consensus up from $0.60 to $0.74.  Our current year consensus estimate has also seen notable improvements over the last two months, going from $2.31 to $2.77.  SIMO has beaten our EPS consensus estimate in three of the last four quarters, and it has a strong chance of topping our estimate when it releases its next quarterly earnings in late October.

Semiconductor Manufacturing International Corporation-(SMI Quick QuoteSMI - Free Report)

Semiconductor Manufacturing International Corporation, also known as SMIC, is a semiconductor foundry that provides integrated circuit manufacturing service at 0.35 micron to 65 nanometer and finer line technologies.  SMIC is based in China, but it also has customer service and marketing offices in the US, Europe, and Japan.  SMI stock is a Zacks Rank #2 (Buy) and it has a market cap of $4.74 billion.

SMIC looks attractive across a range of valuation metrics.  The company’s shares are currently trading at a price-to-book of 0.96, so it could be undervalued.  Semiconductor Manufacturing International Corporation has a forward PE of 14.38 and a PEG of 0.93.  When a company’s PEG is under one, it could be undervalued relative to its estimated long term growth rate. 

Sales are projected to grow by 27.5% this year, while EPS is forecasted to increase by 21.87%.  Semiconductor Manufacturing International posts a solid trailing twelve month net margin of 11.19%.  SMI has a fundamentally sound capital structure, with debt-to-capital coming in at just 0.28.  The company is also relatively liquid since it has a current ratio of 1.72.

Ubiquiti Networks Inc-

Ubiquiti Networks Inc. designs and manufactures broadband wireless solutions across the globe to underserved and underpenetrated markets.  Its products include radios, antennas, management tools and other applications.  UBNT is a Zacks Rank #2 (Buy) and it has a market cap of $4.3 billion.

The company’s stock may not seem like much of a bargain since its forward PE and PEG come in at 19.71 and 1.88 respectively.  That said, Ubiquiti is extremely profitable and this is why its valuation is relatively in line with the industry standard. 

The firm’s net margin of 32% is impressive, but the company’s true profitability can be appreciated by looking at its free cash flows.  Capital expenditures are quite small compared to the cash generated by UBNT’s operating activities, and free cash flows grew by 56.5% last year.  Ubiquiti has been buying back shares in four of the last five years.  This suggests that the company is bullish on its own performance.  This year, earnings and sales are estimated to climb by 11.9% and 10% respectively.       

Bottom Line

One magical screening ingredient which can’t be overlooked is a Zacks Rank #2 (Buy) or better.  The rank helps to find companies which look like dependable earnings candidates.  In addition to this great metric, the Zacks Premium Screenshelp you to add other criteria to find the most superior investment choices.  While this article outlined potential candidates from one screen, the Zacks Premium service gives you access to the “Mid-Sized Stocks for Outsized Returns” and 45 other premium screens designed to give you superior investment returns.

To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.