Core Insights - Investors should focus on companies that generate solid returns after covering all operating and non-operating expenses, making profitable businesses more attractive than money-losing ones [1] Group 1: Semiconductor Stocks - Micron Technology, Inc. (MU) and NVIDIA Corporation (NVDA) are highlighted as top profitable picks, with shares increasing by 239.1% and 38.8% respectively last year [2] - Micron Technology has a 12-month net profit margin of 28.2%, indicating strong profitability among chipmakers [6][8] - NVIDIA reported a 12-month net profit margin of 53%, showcasing its strong ability to generate income from computing solutions [7][8] Group 2: Profitability Metrics - The net income ratio is a key indicator of a company's profitability, reflecting the percentage of net income to total sales revenues [3] - A higher net income ratio implies a company's effectiveness in managing revenues and expenses [3] - Additional screening parameters include Zacks Rank, trailing 12-month sales and net income growth, and a strong buy percentage rating greater than 70% [4][5]

Core Insights - Investors should focus on companies that generate strong returns after covering all expenses, favoring profitable firms over those that are losing money [1] Company Selection - NVIDIA Corporation (NVDA), Micron Technology, Inc. (MU), and Seagate Technology Holdings plc (STX) are identified as top picks from the S&P 500 due to their high net income ratios [2][8] Net Income Ratio - The net income ratio measures a company's profitability by reflecting the percentage of net income to total sales revenues, indicating effectiveness in managing expenses [3] Screening Parameters - Additional criteria for selecting winning stocks include: - Zacks Rank equal to 1, indicating 'Strong Buys' [4] - Trailing 12-month sales and net income growth higher than the industry average [5] - Trailing 12-month net income ratio higher than the industry average [5] - Percentage of broker recommendations rated as Strong Buy greater than 70% [5] Qualified Stocks - The screening process narrowed down over 7,685 stocks to 26, with notable mentions: - NVIDIA has a 12-month net profit margin of 53% [6][8] - Micron has a 12-month net profit margin of 28.2% [7][8] - Seagate Technology has a 12-month net profit margin of 17.9% [9][8]