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I decided to write a second part to my first article which was about companies that could be the next Apple (AAPL) that are in the technology sector. In this article I will be looking at companies outside the technology sector that have the same qualities that make Apple great.

I will be using the same screener criteria that I used in the first article that screen for the qualities that make Apple great. To summarize from my first article in my opinion of what makes Apple stand out fundamentally, financially and performance wise:

  1. High EPS Growth
  2. High Margins
  3. "Cheap" based on the PEG Ratio
  4. Low Debt
  5. Has posted positive returns YTD when the market has been strong
  6. Has posted positive returns over the past year even though the market has had wild swings and a major correction in August 2011

To get my base list I used the Finviz.com Screener criteria to get only companies that are profitable and have liquidity, as well as the other criteria below these three:

  1. P/E: Profitable >0
  2. Forward PE: Profitable >0
  3. Average Volume: Greater than 100K.

After the three above criteria were used there were 2,158 companies that met those criteria, so then I used the following screener criteria to get the list down further. The criteria I will be listing below will nearly meet or exceed that of Apple, and cover the above six things that make Apple stand out fundamentally, financially and performance wise. An example of how I set each screen criteria: Apple has a profit margin of 25.80% so I set the screener criteria to include only stocks with greater than 20% profit margin.

  1. EPS Growth this year: Over +30%
  2. EPS Growth next year: Over +10%
  3. Gross Margin: Over 40%
  4. Profit Margin: Over 20%
  5. Operating Margin: Over 30%
  6. PEG ratio: Under 2
  7. Debt/Equity Ratio: Under .50
  8. Performance YTD: Up
  9. Performance Year: Up
  10. Forward PE is Less than Current P/E ratio (This is not a criteria that can be screen but done visually)

After I entered the above criteria in the screener, my list was down to six stocks after I excluded the technology stocks. I will list them below with a short business Summary from Yahoo Finance, and also below is a table showing the six companies compared to Apple.

Celgene Corporation (CELG):

Celgene Corporation, a biopharmaceutical company, discovers, develops and commercializes various therapies to treat cancer and immune-inflammatory related diseases primarily in the United States and Europe.

FleetCor Technologies, Inc (FLT):

FleetCor Technologies, Inc. provides specialized payment products and services to businesses, commercial fleets, oil companies, petroleum marketers and government entities in North America, Europe, South Africa and Asia. It sells a range of customized fleet and lodging payment programs; and offers various card products to purchase fuel, lodging, and related products and services at participating locations.

Jazz Pharmaceuticals Inc (JAZZ):

Jazz Pharmaceuticals Public Limited Company, a specialty biopharmaceutical company, focuses on the identification, development and commercialization of pharmaceutical products to meet unmet medical needs.

Marketaxess Holdings Inc (MKTX):

MarketAxess Holdings Inc., through its subsidiaries, operates an electronic trading platform that allows investment industry professionals to trade corporate bonds and other types of fixed-income instruments.

Priceline.com Inc (PCLN):

Priceline.com Incorporated, together with its subsidiaries, operates as an online travel company.

Visa Inc (V):

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities.

Company Statistics

EPS Growth this year

EPS Growth next year

Symbol

Company Name

Industry

PEG Ratio

Profit Margin

YTD Perf.

AAPL

Apple Inc

Personal Computers

82.63%

14.71%

0.68

27.13%

30.96%

CELG

Celgene Corp

Biotechnology

51.89%

17.54%

0.85

29.34%

0.74%

FLT

Fleetcor Technologies

Business Services

31.82%

12.69%

1.21

28.32%

26.35%

JAZZ

Jazz Pharmaceuticals

Biotechnology

221.11%

21.46%

0.83

39.67%

9.84%

MKTX

Marketaxess Holdings

Investment Brokerage:National

49.65%

34.53%

1.67

26.79%

6.95%

PCLN

Priceline.com Inc

General Entertainment

99.37%

24.61%

1.32

24.80%

35.13%

V

Visa Inc

Business Services

31.97%

17.02%

1.37

42.74%

11.37%

Closing Thoughts

The six companies that made the final list all come from different industries. But there were some things that were similar between the stocks, for instance CELG and JAZZ are both biotechnology companies and V and FLT both are involved in payment processing. Unlike my first article, all six of the companies that were not technology companies were based in the U.S. Where as in my technology article three of the four companies I listed were based in China and Taiwan. I guess the screens are showing that if you want a technology company with qualities like Apple, foreign technology may be the way to go, and for all the other sectors the U.S. may be the way to go.

Disclaimer

Source: Companies That Could Be That Next Apple: Part 2