8 Tech Stocks Trading Near Highs With Impressive Profitability

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Includes: AAPL, AMT, BCE, CERN, INTC, MORN, NSR, T
by: Kapitall

One way to gauge a company’s profitability is by comparing its profit margins to industry peers – companies with higher margins are taking a greater percentage of revenues as profits, and they have greater control over their cost structures.

We ran a screen on stocks from the tech sector for those trading within 10% of their 52-week highs. We screened these stocks for those with high profitability, beating their industry peers on gross, operating, and pretax margins.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Do you think these stocks will break through to new highs? Use this list as a starting-off point for your own analysis.

List sorted by difference between gross margin and industry.

1. Morningstar Inc. (NASDAQ:MORN): Provides independent investment research to investors worldwide. Market cap of $3.0B. As of market close on October 10, the stock is trading at 7.21% below its 52-week high. TTM gross margin at 72.03% vs. industry gross margin at 42.98%. TTM operating margin at 22.54% vs. industry operating margin at 16.45%. TTM pretax margin at 23.53% vs. industry pretax margin at 12.33%. The stock has had a couple of great days, gaining 7.46% over the last week.

2. NeuStar, Inc. (NYSE:NSR):
Provides technology and directory services to its communications service provider (carrier) and non-carrier, commercial business customers primarily in North America, Europe, and the Middle East. Market cap of $2.02B. As of market close on October 10, the stock is trading at 1.29% below its 52-week high. TTM gross margin at 77.74% vs. industry gross margin at 48.07%. TTM operating margin at 37.85% vs. industry operating margin at 25.94%. TTM pretax margin at 35.15% vs. industry pretax margin at 26.22%. Might be undervalued at current levels, with a PEG ratio at 0.86, and P/FCF ratio at 11.83. The stock has had a couple of great days, gaining 10.22% over the last week.

3. American Tower Corp. (NYSE:AMT):
Operates as a wireless and broadcast communications infrastructure company. Market cap of $22.13B. As of market close on October 10, the stock is trading at 1.62% below its 52-week high. TTM gross margin at 73.69% vs. industry gross margin at 60.32%. TTM operating margin at 39.0% vs. industry operating margin at 21.71%. TTM pretax margin at 28.97% vs. industry pretax margin at 15.40%. The stock has had a couple of great days, gaining 5.79% over the last week.

4. Intel Corporation (NASDAQ:INTC):
Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap of $120.14B. As of market close on October 10, the stock is trading at 3.58% below its 52-week high. TTM gross margin at 74.42% vs. industry gross margin at 61.37%. TTM operating margin at 34.39% vs. industry operating margin at 27.08%. TTM pretax margin at 34.43% vs. industry pretax margin at 27.03%. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.67%, current ratio at 2.23, and quick ratio at 1.84. The stock has had a couple of great days, gaining 10.96% over the last week.

5. BCE, Inc. (NYSE:BCE):
Provides wireline voice and wireless communications services, Internet access, data services, and video services to residential, business, and wholesale customers in Canada. Market cap of $29.68B. As of market close on October 10, the stock is trading at 4.16% below its 52-week high. TTM gross margin at 60.35% vs. industry gross margin at 50.28%. TTM operating margin at 22.04% vs. industry operating margin at 15.40%. TTM pretax margin at 16.19% vs. industry pretax margin at 13.70%. The stock has gained 20.52% over the last year.

6. AT&T, Inc. (NYSE:T):
Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap of $172.86B. As of market close on October 10, the stock is trading at 5.99% below its 52-week high. TTM gross margin at 56.91% vs. industry gross margin at 50.30%. TTM operating margin at 15.51% vs. industry operating margin at 15.39%. TTM pretax margin at 13.85% vs. industry pretax margin at 13.69%. The stock has had a couple of great days, gaining 5.19% over the last week.

7. Cerner Corporation (NASDAQ:CERN):
Designs, develops, markets, installs, hosts, and supports healthcare information technology, healthcare devices, and content solutions for healthcare organizations and consumers worldwide. Market cap of $11.57B. As of market close on October 10, the stock is trading at 8.03% below its 52-week high. TTM gross margin at 47.67% vs. industry gross margin at 45.44%. TTM operating margin at 20.12% vs. industry operating margin at 13.93%. TTM pretax margin at 20.47% vs. industry pretax margin at 11.47%. The stock is a short squeeze candidate, with a short float at 11.52% (equivalent to 10.36 days of average volume). The stock has gained 59.75% over the last year.

8. Apple Inc. (NASDAQ:AAPL):
Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap of $360.46B. As of market close on October 10, the stock is trading at 8.05% below its 52-week high. TTM gross margin at 41.42% vs. industry gross margin at 41.34%. TTM operating margin at 30.43% vs. industry operating margin at 23.72%. TTM pretax margin at 30.78% vs. industry pretax margin at 23.59%. Might be undervalued at current levels, with a PEG ratio at 0.72, and P/FCF ratio at 12.39. The stock has gained 31.64% over the last year.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.