Profitable Tech: Growth through Technological Innovation
The Profitable Tech Investment Strategy provides a refined pathway to substantial growth within the vibrant and rapidly expanding technology sector. Utilizing a systematic approach grounded on stringent filters, our approach targets promising mid to large-cap tech companies that have proven financial performance and a clear growth trajectory. This method offers a unique opportunity for investors seeking to leverage the enormous potential of the technology industry.
Chosen Stock Filters
This is the screenshot of the filters in the SimFin stock screener:
Industry Classification: We specifically target companies operating within the technology sector.
Enterprise Value: Our focus lies on mid to large-cap companies, with an enterprise value between $1 billion and $100 billion, striking a balance between stability and growth potential.
Revenue Growth Rate: We seek companies whose 5-year, 3-year, and 1-year trailing revenue growth rates exceed the median of all companies, ensuring consistent growth.
Operating Margin: Our investment strategy emphasizes firms with an operating margin exceeding 10%, indicating efficient operations and profitability.
Free Cash Flow: We insist on a positive free cash flow in the trailing twelve months, ensuring the companies have a healthy cash reserve for operational needs and future investments.
Snapshot of Listed Stocks
Take a look at the snapshot of the dynamic stock list from May 25, 2023. On this particular day, a total of 32 stocks successfully passed the criteria of the portfolio creator "fhainzl". Among them are truly innovative enterprises like Autodesk, Analog Devices, Paycom and Microchip Technology.
The Profitable Tech strategy is driven by the intent to deliver consistent, above-average returns by investing in high-performing tech companies. By leveraging a data-driven approach, we focus on companies that have consistently shown solid growth and profitability, thereby offering investors substantial returns while keeping risk at a controlled level.
Investors are offered a unique opportunity to participate in the growth of leading technology companies that show resilience and steady performance, providing both growth and stability.
While we diligently apply filters to mitigate risks, investing in the technology sector inherently involves market volatility and sector-specific risks. However, our strategy aims to manage these risks through prudent stock selection and ongoing portfolio assessment.
Our backtesting from July 2011 to March 2023 demonstrates the robustness of the Profitable Tech strategy. The results show a compelling 18% CAGR, outperforming the S&P500 by a substantial 7% annually.
The Profitable Tech Investment Strategy is a carefully designed approach that targets robust growth and substantial returns in the technology sector. With its unique stock filters and backtest results demonstrating a solid track record, it presents an attractive investment opportunity.
The strategy was created using the Stock Screener tool from SimFin and was subjected to backtesting. Details on the quantitative criteria and the backtesting results can be viewed in detail here: https://app.simfin.com/portfolio/641ca037eab0c57949fb0699
Disclaimer: Investing in stocks always involves a risk of loss. Past performance does not guarantee future returns. Please consider your financial situation and consult a financial advisor before making any investment.
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