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 two technology stocks using one of our premium screens known as “Discount Fundamental Strength”. Some of the metrics of this screen requires a stock to have an average daily trading volume of at least 100,000 shares over the last 20 days, a debt-to-equity under 0.5, and a price-to-sales under one. We added an additional criterion which allowed us to screen for stocks from the technology sector. Without any further ado, let’s take a look at what our modified premium screen has found for us today.
Sanmina provides electronics contract manufacturing services. It focuses on engineering and fabricating complex components. SANM also provides end-to-end supply chain solutions to OEMs (original equipment manufacturers). Sanmina’s stock is a Zacks Rank #3 (Hold) and it gets an “A” for Growth and Value in our Style Scores.
Sanmina looks like a viable investment choice because of its well-roundedness across fundamental financial metrics. The company’s current ratio of 1.64 shows that SANM is relatively liquid, and its debt-to-equity of 0.28 shows that it is not very leveraged either. One especially promising trait of Sanmina’s is its exceptional profit margins compared to the industry. SANM has a trailing twelve month net margin of 6.24%, and this far surpasses the industry’s average net margin of 2.47%.
In spite of looking like a strong company within its industry, SANM looks quite cheap across a range of valuation metrics. Sanmina has a forward PE of 12.48, and its PEG stands at just 0.71. A PEG under one could suggest that there is value present. SANM also has a price-to-sales of 0.32, and this further supports the notion that this stock may be undervalued. Sanmina has surpassed our EPS consensus estimate in two of the last three quarters, and t is slated to release its next quarterly earnings report in the beginning of November.
Vishay Intertechnology Inc-(VSH - Free Report)
Vishay Intertechnology is a manufacturer and supplier of discrete passive and discrete active electronic components such as resistors, capacitors, inductors, diodes, and transistors. Vishay Intertechnology is a Zacks Rank #1 (Strong Buy) and it has a market cap of $2 billion.
Like Sanmina, VSH is solid across important valuation metrics. It has a current ratio and debt-to-equity of 4.18 and 0.2 respectively. The corporation’s EPS is projected to grow by 23.61% this year, and over the last 3 months our current year EPS consensus has grown by 4.7% to $0.89. The company has topped our EPS estimate in each of the last four quarters, and in that span of time it has beaten our consensus by an average of 19% per quarter.
Vishay Intertechnology’s stock seems to be pretty cheap right now. The firm’s price-to-sales and PEG come out to just 0.9 and 0.89 respectively. Both of these metrics are under one, and this helps in supporting an argument for why VSH is a bargain opportunity. VSH also has a price-to-book of 1.25 and a forward PE of 15.71. The corporation is expected to release its next quarterly earnings report in early November.
One magical screening ingredient which can’t be overlooked is a Zacks Rank #3 (Hold) 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 “Discount Fundamental Strength” and 45 other premium screens designed to give you superior investment returns.
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