Last week I sorted the stocks over $100 billion market cap by operating margin and forecasted revenue growth. I added these numbers for each stock to create what I call Value Points. A score above 40 represents the top 15% of the sample group. The next step is to determine whether these stocks are undervalued or overvalued relative to their Value Points.
Using Zacks.com’s stock screener, I downloaded all public stocks with: (1) market cap above $100 billion, (2) TTM operating margin above 0%, and (3) revenue growth forecast above 0%. This screen gave me 118 stocks. I then put those stocks in a scatter plot to identify the value stocks:
[Mega Cap Value Score](https://docs.google.com/spreadsheets/d/1PR2deixvP6flj7eLHHi1ZYkkUQk40XbgKPeyMp-STWw/edit?usp=sharing)
The Value Score is the ratio of the Value Points divided by the Enterprise Value/Projected Operating Profit multiple. I consider a Value Score above 2.0 as a potential Buy. A Value Score below 1.0 is considered overpriced and a potential Sell.
Some of the standout stocks are well-known including NVDA, TSM, NVO and MU. I’ve written before about the financial stocks SCHW and V as potential BUYs. Unfortunately, the market has not yet come around on these ones.
One big caveat is that Zacks is a free stock screener and has plenty of outdated or incorrect data. Please do your own due diligence before buying any stock based on this analysis.
\[edit\] I added the data behind the chart in a separate tab.
