Top Rated IT Stocks: Insights from Greenblatt's Strategy

An in-depth analysis reveals how top-rated IT stocks like HP and Leidos fare under Joel Greenblatt's investment strategy, impacting investor decisions. Stocks receiving high scores indicate strong fundamentals and potential growth.

Date: 14-04-2025

AI Rating: 7

Overview of Top Rated IT Stocks
According to recent analysis based on Joel Greenblatt's Earnings Yield Investor model, HP Inc. (HPQ) stands out as a robust large-cap value stock in the Computer Hardware sector with a perfect score of 100%. This suggests exceptional underlying fundamentals and a favorable valuation outlook. Conversely, Leidos Holdings Inc. (LDOS) and NetApp Inc. (NTAP) both received scores of 80%, indicating solid interest but not quite the same level of appeal. Cognizant Technology Solutions Corp. (CTSH) is on the lower end with a 70% score but still remains significant in the software and programming sector.

Earnings Yield and Return on Capital
The analysis primarily indicates a neutral position for both earnings yield and return on tangible capital for HPQ, LDOS, NTAP, and CTSH. None of these companies demonstrated significant earnings yield, which usually suggests that investors might not expect outsized returns in the near term. Consequently, while HPQ's strong fundamentals make it particularly attractive, the neutral ratings for earnings yield across these firms may temper potential stock price appreciation in the short term.

Final Ratings
From a professional investor's perspective, HPQ's perfect score provides an endorsement for its stock potentially seeing upward momentum. Meanwhile, both LDOS and NTAP, although rated favorably, are positioned more cautiously due to their neutral earnings yield ratings, indicating limited upside potential in the current market context. CTSH's lower score points to a more negative sentiment, suggesting weaker growth prospects. Overall, the fundamental assessments steering towards high-quality stocks demonstrate varying tiers of attraction and risk within the sector.

Overall, the insights provided by the report highlight aspects like revenue growth potential and market positioning in the IT sector, which could influence short-term stock price fluctuations, with HPQ being the standout.

Stocks: HPQ LDOS NTAP CTSH