October 1, 2022
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As investors continue grappling with fears that the Federal Reserve’s aggressive interest rate hikes may result in economic downturn, five Standard & Poor’s 500 Index stocks with high financial strength and profitability and price declines of at least 15% are Monolithic Power Systems Inc. (MPWR, Financial), EPAM Systems Inc. (EPAM, Financial), Old Dominion Freight Line Inc. (ODFL, Financial), Accenture PLC (ACN, Financial) and Copart Inc. (CPRT, Financial) according to the All-in-One Screener, a Premium GuruFocus feature.

Dow sinks below 30,000 as Fed signals more interest rate hikes ahead

On Friday, the Dow Jones Industrial Average closed at 29,592.85, down 483.83 points from Thursday’s close of 30,076.68 and below 30,000 for the first time since June 17.

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Stocks continued their September slide on the heels of the Fed raising interest rates to a range of 3% to 3.25%, the third consecutive 0.75% increase in as many rate hikes. Fed Chairman Jerome Powell also said the central bank will continue its fight to combat inflation, even if it means further rate hikes into next year.

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According to the Aggregated Statistics Chart, a Premium feature of GuruFocus, the mean one-month total return for the S&P 500 stocks is -10.40% with a median of -10.21%.

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As such, investors may find opportunities in high-quality stocks that have declined more than 15% in the month to date. GuruFocus’ GF Score, which has been shown to be strongly correlated with stock performance based on backtesting from 2006 to 2021, includes key quality ranks like financial strength and profitability.

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Monolithic Power Systems

Shares of Monolithic Power Systems (MPWR, Financial) traded around $363.08, showing the stock is significantly undervalued based on Friday’s price-to-GF Value ratio of 0.60. The stock has declined by approximately 26.63% over the past month.

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The Kirkland, Washington-based power management semiconductor company has a GF Score of 98 out of 100, driven by a rank of 10 out of 10 for profitability, growth, financial strength and GF Value despite momentum ranking just 6 out of 10.

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Monolithic Power Systems’ profitability ranks 10 out of 10, driven by several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 8 out of 9 and an operating margin that has increased approximately 7.9% per year over the past five years and outperforms more than 83% of global competitors.

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Gurus with holdings in Monolithic Power Systems include
Steven Cohen
(Trades, Portfolio)’s Point72 Asset Management and
Jim Simons
(Trades, Portfolio)’ Renaissance Technologies.

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EPAM Systems

Shares of EPAM Systems (EPAM, Financial) traded around $364.44, showing the stock is significantly undervalued based on Friday’s price-to-GF Value ratio of 0.65. The stock has declined by approximately 16.30% over the past month.

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The Newtown, Pennsylvania-based product engineering company has a GF Score of 100 out of 100, driven by a rank of 10 out of 10 for profitability, growth and GF Value and a rank of 9 out of 10 for financial strength and momentum.

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EPAM Systems’ positive investing signs include a 4.5-star business predictability rank and an operating margin that has increased approximately 4.8% per year on average over the past five years.

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Gurus with holdings in EPAM Systems include
Steve Mandel
(Trades, Portfolio)’s Lone Pine and
Ron Baron
(Trades, Portfolio)’s Baron Funds.

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Old Dominion Freight Line

Shares of Old Dominion Freight Line (ODFL, Financial) traded around $241.93, showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.74. The stock has declined by approximately 17.34% over the past month.

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The Thomasville, North Carolina-based trucking company has a GF Score of 100 out of 100, driven by a rank of 10 out of 10 for profitability, growth and momentum and a rank of 9 out of 10 for financial strength and GF Value.

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The company’s high profitability rank is driven by several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 out of 9 and an operating margin that has increased approximately 9.8% per year on average over the past five years and outperforms more than 86% of global competitors.

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Accenture

Shares of Accenture (ACN, Financial) traded around $257.32, showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.77.

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The Dublin, Ireland-based information technology consulting company has a GF Score of 99 out of 100, driven by a rank of 10 out of 10 for profitability, growth and momentum despite financial strength and GF Value ranking between 7 and 8 out of 10.

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Accenture’s positive investing signs include a five-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that has increased by approximately 1.5% per year over the past five years and is outperforming approximately 83% of global competitors.

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Copart

Shares of Copart (CPRT, Financial) traded around $105.44, showing the stock is significantly undervalued based on Friday’s price-to-GF Value ratio of 0.67.

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The Dallas-based vehicle auction and remarketing company has a GF Score of 100 out of 100, driven by a rank of 10 out of 10 for profitability, growth, GF Value and momentum while financial strength ranks 9 out of 10.

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Copart’s positive investing signs include a four-star business predictability rank and an operating margin that has increased approximately 4.9% per year over the past five years and outperforms more than 99% of global competitors.

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