Validea's Top Information Technology Stocks Based On Joel Greenblatt

Validea's Earnings Yield Investor model, based on Joel Greenblatt's strategy, identifies NCR ATLEOS CORP (NATL) and TERADATA CORP (TDC) as top-rated Information Technology stocks, both receiving a 90% rating, indicating strong interest based on underlying fundamentals and valuation; OPEN TEXT CORP (USA) (OTEX) and DELL TECHNOLOGIES INC (DELL) received a rating of 80% and HARMONIC INC (HLIT) received a rating of 60%.

Analysis

Validea's Earnings Yield Investor model, based on Joel Greenblatt's strategy, has identified NCR ATLEOS CORP (NATL) and TERADATA CORP (TDC) as top-rated Information Technology stocks, each receiving a 90% score indicating strong interest and, crucially, a "PASS" in the model's final ranking. This positive assessment for NATL, a mid-cap financial technology provider specializing in self-directed banking solutions, and TDC, a mid-cap cloud analytics and AI data platform company, occurs despite both firms registering "NEUTRAL" for the specific criteria of Earnings Yield and Return on Tangible Capital. This suggests that other unlisted factors or the overall combination of fundamentals and valuation are compelling according to the model's methodology. In contrast, OPEN TEXT CORP (OTEX) and DELL TECHNOLOGIES INC (DELL), while achieving an 80% score—a level typically indicating some model interest—both received a "FAIL" in the final ranking, indicating these stocks do not meet the strategy's full criteria despite the score. HARMONIC INC (HLIT) scored lower at 60% and also failed the final ranking. The model's objective is to identify companies with high return on capital and earnings yields; the "NEUTRAL" ratings for these components on the passing stocks are noteworthy, implying the "PASS" criteria are met through a holistic assessment rather than exceptional performance in every individual metric presented.

Key Decisions for Investors

• Investors should prioritize further due diligence on NCR ATLEOS CORP (NATL) and TERADATA CORP (TDC), as these are the only stocks highlighted by Validea's Greenblatt model that achieved both a strong interest score (90%) and a definitive "PASS" in the final ranking, particularly examining the qualitative or quantitative factors that led to the pass despite neutral individual metrics on earnings yield and return on tangible capital.
• For OPEN TEXT CORP (OTEX) and DELL TECHNOLOGIES INC (DELL), the "FAIL" status in the final ranking, despite their 80% model scores, should be treated as a significant disqualifier under this specific investment strategy, and investors should seek to understand the reasons for this failure before considering these stocks based on this particular screen.
• The consistent "NEUTRAL" ratings for Earnings Yield and Return on Tangible Capital across all reviewed stocks, including those that passed the screen, suggests that the Greenblatt model's "Final Ranking" likely incorporates a broader or differently weighted set of fundamental and valuation criteria than these two isolated metrics, a nuance to consider when applying this strategy.