New stock ideas

Screen for opportunities among robotics, fintech, environmental science, and more.

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After a turbulent finish to 2018, stocks appear to have regained their momentum thus far this year (see The S&P 500 has recouped most of its late 2018 losses).

Of course, some of the factors that contributed to the market decline in late 2018 remain—including global growth concerns stemming from trade wars and other factors, uncertainty surrounding the US government shutdown, and patches of overpriced stock valuations.

If you think last year’s stock volatility has abated for the time being, and you have a bullish outlook on stocks, you might consider Fidelity's Stock Screener to jump start your idea generation process for opportunities in a particular type of business or industry. The screener can help you explore some common investment “themes” (login required to access thematic screener). Among the themes you can investigate are robotics, fintech, founder run, environmental science, and wind energy.*

Here, we feature these 5 thematic stock screens, plus the top 5 results for each, filtered by fundamental data points.

Robotics

One investing case for robotics involves the ubiquitous impact this technology could potentially have on an array of industries—to an even greater extent than they are utilized now. One driver for enhancements in robotic technology is advancements in tactile sensors and the incorporation of artificial intelligence. These enhancements may facilitate expanded adoption of autonomous vehicles and robotic manufacturing capabilities, among other uses.

As of February 21, the top 5 results of this screen, sorted by highest PEG ratio (P/E ratio divided by expected growth rate, which is a measure of relative value) and largest market capitalization are:

  • Intuitive Surgical (ISRG)—6.14 PEG ratio
  • Microchip Technology (MCHP)—5.75 PEG ratio
  • Fortive (FTV)—3.12 PEG ratio
  • Nvidia (NVDA)—2.82 PEG ratio
  • Rockwell Automation (ROK)—2.53 PEG ratio

The screen above raises an important point about the use and value of a screener. While these companies have exposure to robotics, in many cases, this represents a small percentage of their total revenues. Each screen provides more information on Fidelity.com as to the criteria that was used to determine exposure to a particular theme. When you are looking for investments in certain industries, consider how significant that theme is to the business you are evaluating.

Fintech

Financial technology, or "fintech" as it is more commonly known, is another thematic screen that you might consider exploring. Zacks Investment Research believes fintech is one of the fastest growing areas in the technology sector. Fintech has been attributed as a disruptor within traditional financial businesses like payments, lending, investing, and currency transactions.

As of February 21, the top 5 results of this screen, sorted by highest PEG ratio and capitalization are:

  • Fidelity National Information Services (FIS)—3.68 PEG ratio
  • Intuit (INTU)—3.34 PEG ratio
  • Paychex (PAYX)—2.98 PEG ratio
  • Verisk Analytics (VRSK)—2.88 PEG ratio
  • S&P Global (SPGI)—2.75 PEG ratio

As was the case with the previous screen, in many cases, fintech represents a relatively small percentage of the total revenues for these companies.

Founder run

Some investors believe that companies run by their founder may have an intrinsic advantage over others that are not run by the founder. This perception may be due to a supposed competitive advantage a founder might have, relative to a non-founder, in experience running the company, a greater desire to have the company succeed, and incentives and motivation that not only prompt them to take the long view for the business, but also align their interests more closely with those of shareholders.

As of February 21, the top 5 results of this screen from Zacks, sorted by highest PEG ratio and market capitalization are:

  • Salesforce.com (CRM)—4.65 PEG ratio
  • Las Vegas Sands (LVS)—4.53 PEG ratio
  • Veeva Systems (VEEV)—3.63 PEG ratio
  • Nvidia (NVDA)—2.82 PEG ratio
  • Netflix (NFLX)—2.71 PEG ratio

Of course, simply because a company is run by its founder, that does not mean management is superior relative to professional leaders, or that the company will outperform its non-founder-run peers. Be sure to do your due diligence when evaluating this type of screen.

Environmental sciences

This theme filters for companies that are involved in commercial and residential garbage collection, recycling, energy production from waste materials, hazardous materials treatment and transportation, pest control, and other environmental services.

As of February 21, the top 5 results of this screen, sorted by highest PEG ratio and market capitalization are:

  • Rollins (ROL)—6.79 PEG ratio
  • Republic Services (RSG)—2.05 PEG ratio
  • Waste Management (WM)—1.97 PEG ratio
  • Clean Harbors (CLH)—N/A PEG ratio
  • Stericycle (SRCL)—N/A PEG ratio

The last 2 results of this screen have no PEG ratio, implying that they currently have negative earnings (or, in some cases, are expected to have declining earnings).

Wind energy

Expanding adoption of wind energy—by individuals, corporations, and governments—is one reason to believe in the long-term prospects for these investments. According to Zacks, 74% of US Congressional districts operate wind energy projects or wind-related manufacturing. Wind energy projects are also pervasive in Europe and other countries around the world. As a source of energy, wind offers the potential for clean energy solutions, as well as potentially declining operating costs and stable pricing.

As of February 21, the top 5 results of this screen, sorted by highest PEG ratio and market capitalization are:

  • Southern Company (SO)—12.20 PEG ratio
  • Exelon (EXC)—7.30 PEG ratio
  • Consolidated Edison (ED)—5.47 PEG ratio
  • Duke Energy (DUK)—5.24 PEG ratio
  • DTE Energy (DTE)—4.69 PEG ratio

Like some of the other screens, a relatively small percentage of the total revenues for these companies is derived from the theme of this screen—wind in this case.

Due diligence

More research is needed to determine if any of these stocks are right for your specific strategy. You should fully understand the risks involved, and each investing opportunity should be considered within the context of a well-diversified investment strategy that conforms to your specific time horizon, objectives, and risk parameters.

Next steps to consider

Find new investing ideas and get up-to-the-minute market data.

Learn what you need to know before trading the market.

Learn more about thematic investing.

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