Validea's Top Information Technology Stocks Based On Joel Greenblatt

Validea's Earnings Yield Investor model, which applies Joel Greenblatt's historically outperforming "Magic Formula" focusing on high return on capital and earnings yields, has identified several top-rated Information Technology stocks. HP Inc. (HPQ) received a 100% rating, while Cognizant Technology Solutions Corp (CTSH), Strategy Inc. (MSTR), and Telefonaktiebolaget LM Ericsson - ADR (ERIC) each scored 90%, indicating strong interest from the model based on their underlying fundamentals and valuation.

Analysis

A quantitative screen from Validea, applying Joel Greenblatt's historically successful "Magic Formula," has identified several top-rated Information Technology stocks based on high return on capital and earnings yields. HP Inc. (HPQ) achieved a perfect 100% rating, indicating the strongest possible alignment with the model's value criteria. Additionally, Cognizant Technology Solutions (CTSH), Strategy Inc. (MSTR), and Ericsson (ERIC) each garnered a 90% score, signifying strong interest from the strategy. These companies provide exposure to diverse segments including computer hardware (HPQ), IT services and AI (CTSH), enterprise analytics and bitcoin treasury (MSTR), and telecom infrastructure (ERIC). Notably, while all four companies received a final "PASS" and high overall ratings, the article's detailed tables show both their Earnings Yield and Return on Tangible Capital as "Neutral." This suggests that Validea's proprietary interpretation of the Greenblatt model assigns a high final rank based on a complex weighting system where the underlying quantitative values are strong, even if they don't meet a threshold for a higher qualitative label.

Key Decisions for Investors

• Investors employing quantitative value strategies should consider this list, particularly HPQ with its 100% rating, as a strong starting point for further due diligence.
• It is crucial to investigate the apparent discrepancy between the 'Neutral' ratings for the core metrics of Earnings Yield and Return on Tangible Capital and the very high overall scores to fully validate the investment thesis.
• This screen provides a list of potential value opportunities across diverse technology sub-sectors, which could be used to build a balanced, value-oriented position within a broader technology allocation.