Top-Performing Stocks With High Quality and Low Capital Expenditures

As of Friday, GuruFocus’ “High Quality, Low CapEx” model portfolio has returned approximately 15.69% in the year to date, outperforming the Standard & Poor’s 500 index benchmark’s return of approximately 12.93%. The top-performing five stocks in the portfolio are Fortinet Inc. (

FTNT, Financial), Nvidia Corp. (NVDA, Financial), Alphabet Inc. (GOOGL, Financial)(GOOG, Financial), Bio-Techne Corp. (TECH, Financial) and Old Dominion Freight Line Inc. (ODFL, Financial).

GuruFocus launched the “High Quality, Low CapEx” model portfolio in January. As the name suggests, stocks making the “High Quality, Low CapEx” screen have high financial strength and profitability and are in market sectors that are noncyclical and have low capital expenditures.

Table 1 lists the number of “High Quality, Low CapEx” stocks in each GuruFocus region as of Friday.

Table 1

Fortinet

Shares of Fortinet (

FTNT, Financial) traded around $240.88, up approximately 61.58% year to date. The stock is significantly overvalued based on Friday’s price-to-GF Value ratio of 1.65.

Fortinet sells cybersecurity products and services to small and midsize businesses, enterprises and government entities. GuruFocus ranks the Sunnyvale, California-based company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and an operating margin that has increased over 20% per year on average over the past five years and is outperforming more than 85% of global competitors.

Gurus with large holdings in Fortinet include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Pioneer Investments (Trades, Portfolio).

Nvidia

Shares of Nvidia (

NVDA, Financial) traded around $764.05, up approximately 47.17% year to date. The stock is significantly overvalued based on Friday’s price-to-GF Value ratio of 1.63.

Nvidia designs graphic processing units for a wide range of end markets, including PCs for gaming, data centers and automotive infotainment systems. GuruFocus ranks the Santa Clara, California-based company’s profitability 9 out of 10 on several positive investing signs, which include a three-star business predictability rank, a three-year revenue growth rate that outperforms over 85% of global competitors and an operating margin that has increased approximately 5.80% per year on average over the past five years.

Gurus with large holdings in Nvidia include Baillie Gifford (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio).

Alphabet

Class A shares of Alphabet (

GOOGL, Financial) traded around $2,433.20, up approximately 39.79% year to date. The stock is significantly overvalued based on Friday’s price-to-GF Value ratio of 1.35.

GuruFocus ranks the Mountain View, California-based interactive media giant’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and profit margins and returns outperforming more than 85% of global competitors.

Bio-Techne

Shares of Bio-Techne (

TECH, Financial) traded around $436.31, up approximately 38.61% year to date. The stock is significantly overvalued based on Friday’s price-to-GF Value ratio of 1.70.

GuruFocus ranks the Minneapolis-based life science product manufacturer’s profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and profit margins and returns outperforming more than 87% of global competitors.

Old Dominion Freight Line

Shares of Old Dominion Freight Line (

ODFL, Financial) traded around $254.50, up 29.37% year to date. The stock is significantly overvalued based on Friday’s price-to-GF Value ratio of 1.87.

GuruFocus ranks the Thomasville, North Carolina-based transportation company’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that has increased approximately 6.7% per year on average over the past five years and is outperforming more than 88% of global competitors.