With all the volatility in the market recently, it can be easy to lose touch with fundamentals. So we thought it would be a good time to take a look at the most widely followed stocks in the market and how they stack up fundamentally.
Validea’s guru models quantitatively apply the criteria of some of history’s best investors, including Warren Buffett, Peter Lynch, Ben Graham and Martin Zweig.
Here is how they current evaluate the most popular stocks in the market.
Apple receives a “Hold” rating from Validea’s guru models. The company scores well on several growth and momentum-focused strategies:
- 86% on the Patient Investor model based on Warren Buffett’s approach
- 87% on the P/E Growth Investor model inspired by Peter Lynch
- 80% on the Growth/Value Investor model based on James P. O’Shaughnessy’s strategy
Apple’s consistent earnings growth, strong return on equity (83.6% average over 10 years), and solid cash flow generation are key positives highlighted by these models. However, its relatively high P/E ratio of 34.5 causes it to fail some value-oriented criteria.
Amazon also receives a “Hold” rating. The company performs exceptionally well on growth-oriented models:
- 100% on the P/B Growth Investor model based on Partha Mohanram’s strategy
- 89% on the Momentum Investor model
- 80% on the Growth/Value Investor model inspired by James P. O’Shaughnessy
Amazon’s strong sales growth, consistent return on assets, and willingness to invest heavily in future growth through R&D and capital expenditures are key factors driving its high scores on these models. However, its lack of dividends and high P/E ratio cause it to fail some value-focused criteria.
Microsoft receives a “Hold” rating but shows strength across multiple guru models:
- 94% on the Twin Momentum Investor model based on Dashan Huang’s approach
- 87% on the P/E Growth Investor model inspired by Peter Lynch
- 86% on the Patient Investor model based on Warren Buffett’s strategy
Microsoft’s consistent earnings growth, strong return on equity (32.7% average over 10 years), and solid cash flow generation are highlighted as positives. The company’s momentum in both fundamental metrics and stock price performance is also noted as a strength.
NVIDIA receives a “Hold” rating but shows exceptional performance on several models:
- 100% on the Twin Momentum Investor model
- 100% on the Earnings Revision Investor model based on Wayne Thorp’s strategy
- 94% on the Quantitative Momentum Investor model inspired by Wesley Gray
NVIDIA’s strong earnings growth, positive earnings revisions, and exceptional stock price momentum are key factors driving these high scores. However, its high valuation metrics cause it to fail some value-oriented criteria.
Tesla receives a “Hold” rating and shows mixed performance across the guru models:
- 80% on the Growth/Value Investor model based on James P. O’Shaughnessy’s approach
- 77% on the P/B Growth Investor model inspired by Partha Mohanram
- 57% on the Contrarian Investor model based on David Dreman’s strategy
Tesla’s strong sales growth and improving profitability are noted as positives. However, its high valuation metrics and lack of consistent long-term profitability cause it to fail several value-oriented criteria.
These five widely followed stocks show varying degrees of alignment with Validea’s guru models. While all currently receive “Hold” ratings, they each demonstrate strengths in different areas:
- Apple and Microsoft show broad appeal across growth, value, and momentum strategies.
- Amazon and NVIDIA excel in growth and momentum-focused models but struggle with value criteria.
- Tesla shows promise in growth metrics but faces challenges with traditional value measures
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