| Symbol | Company | Pick history | Pick price | % Return at exit | Action | Sectors | Industries | Incentive | Rationale | hf:tax:sector | hf:tax:industry |
|---|---|---|---|---|---|---|---|---|---|---|---|
| MCHP | Microchip Technology Incorporated | 02/01/2026 | $63.72 | 19.1% | Removed | Technology | Semiconductors | Valuation Stretch Amid Earnings Weakness | • Rotated out as other semiconductor positions offer stronger relative value at current pricing levels • Despite recent price gains (+44.23% 1-year return), concerning fundamentals include negative P/E (-167.15), revenue decline (-23.36%), and EBITDA collapse (-55.26%) • Valuation appears stretched with stock trading at 6.13x book value while posting negative EPS (-$0.45) and weak operating margins (3.68%) • Elevated inventory levels (251 days vs target of 130-150) required major restructuring including facility closures and ~2,000 layoffs • Several positives remain: 2.4% dividend yield, strong position in industrial/automotive sectors, and recent analyst upgrades (targets $85-90) • This change reflects portfolio rotation toward relatively stronger opportunities, not a sell signal | technology | semiconductors |
| TER | Teradyne, Inc. | 02/01/2026 | $193.56 | 24.5% | Removed | Technology | Semiconductors | Valuation premium amid market volatility | • Rotated out due to stretched valuation metrics relative to other portfolio opportunities • Stock's P/E ratio of 87.7 sits significantly above semiconductor industry averages, with a concerning negative PEG ratio of -6.9 suggesting potential growth-value misalignment • Price has surged dramatically (+131.8% over six months, +109.1% over one year), now trading at 94.5% of its 52-week high, creating elevated volatility risk • Currently trading at $251.87, substantially exceeding both analyst fair value targets ($220) and InvestingPro fair value estimate ($161.33) • Company maintains positive fundamentals with strong AI-related test demand and recent earnings beats, with memory revenue growing 110% sequentially in Q3 2025 • This change reflects portfolio rebalancing toward more attractively valued opportunities, not a sell signal | technology | semiconductors |
| NSIT | Insight Enterprises, Inc. | 02/01/2026 | $81.47 | 3.1% | Removed | Technology | Technology Distributors | Market decline amid revenue challenges | • Rotated out due to significant market underperformance relative to other opportunities • Stock has declined sharply (-51% over 1 year, -30% over 6 months), now trading at just 46% of its 52-week high • Revenue declined 6.7% over the past year with negative EBITDA growth (-7.8%), suggesting weakening business conditions • Recent Q3 2025 earnings missed forecasts ($2.43 EPS vs $2.49 expected) alongside CEO Joyce Mullen's retirement announcement, adding volatility • Despite challenges, strategic AI initiatives and partnership with Stripe show promising future direction, with analysts noting significant undervaluation (fair value ~$120 vs current ~$82) • This change reflects portfolio rotation based on relative strength metrics, not a sell signal | technology | technology-distributors |
| CIEN | Ciena Corporation | 02/01/2026 | $233.87 | 7.7% | Removed | Technology | Communication Equipment | Valuation disconnect amid market volatility | • Rotated out as other opportunities show better valuation-to-performance balance in our ML strategy • Stock price has surged dramatically (189% 1-year return, 184% 6-month return), creating valuation concerns with P/E ratio reaching 297x and PEG ratio of 6.18 • Current price ($253) significantly exceeds InvestingPro Fair Value ($169.73), suggesting limited upside potential despite strong operational metrics • Recent Bank of America downgrade to "Neutral" cited "downside risk to peaking backlog levels" and "rich valuation" despite acknowledging growth potential • Company maintains solid fundamentals with impressive revenue growth (18.8%) and EBITDA expansion (38.9%), positioning it well in AI networking infrastructure • This change reflects portfolio rotation based on relative metrics, not a sell signal | technology | communication-equipment |
| QCOM | QUALCOMM Incorporated | 02/01/2026 | $151.59 | Live | Added | Technology | Semiconductors | Growth Leader with Strong Market Position | • Qualcomm demonstrates exceptional growth momentum with 13.7% revenue growth (reaching $44.3B) and even stronger EBITDA growth of 17%, signaling improving profitability. • The company consistently outperforms expectations, with recent quarterly results exceeding forecasts by ~4.8% for revenue and ~4.5% for earnings. • Strategic diversification beyond smartphones into high-growth markets is yielding results, with automotive segment projected to grow at 22% annually to reach $8B by 2029. • Current valuation appears attractive with stock trading at ~73% of its 52-week high while analyst targets suggest ~25% upside potential (fair value of $190-198). • Record free cash flow of $12.8B demonstrates financial strength, supporting continued shareholder returns through dividends (2.35% yield) and share repurchases. • Strategic acquisitions like Alphawave Semi position Qualcomm to capitalize on data center and AI opportunities, creating additional growth vectors beyond its core markets. | technology | semiconductors |
| UCTT | Ultra Clean Holdings, Inc. | 02/01/2026 | $43.68 | Live | Added | Technology | Semiconductors | Strong Momentum in Semiconductor Growth Play | • Ultra Clean Holdings (UCTT) has delivered exceptional market performance with a remarkable ~96% return over the past 6 months and ~72% in the last month alone. • The stock is showing powerful momentum, trading near its 52-week high while demonstrating improving fundamentals with gross margins expanding to 17% (up from 16.3% last quarter). • UCTT is strategically positioned to capitalize on the semiconductor industry's growth trajectory toward $1 trillion by 2030, particularly in AI and high-performance computing. • Recent EPS of $0.28 exceeded analyst expectations by 27%, demonstrating operational efficiency despite revenue challenges. • Analyst sentiment remains strongly bullish, with Needham raising its price target to $35 while maintaining a Buy rating, highlighting confidence in the company's growth prospects. | technology | semiconductors |
| BMI | Badger Meter, Inc. | 02/01/2026 | $146.58 | Live | Added | Technology | Hardware, Equipment & Parts | Growth Leader at Attractive Entry Point | • BMI stands out as an ML-selected buy opportunity following a 30% price pullback despite strong fundamentals, creating an attractive entry point with significant upside potential to the $185 analyst target price. • Impressive growth trajectory evidenced by 10.9% revenue growth, 14.75% EBITDA growth, and 17.65% dividend growth, supported by expanding margins (operating profit at 20%, up 90 basis points). • Recent award of the massive Puerto Rico PRASA project (1.6 million service connections) positions BMI for accelerated growth in H2 2026, with management maintaining a high single-digit growth outlook over a five-year horizon. • Strong recurring revenue model with 85% replacement-based business and growing SaaS revenue (+27% YoY to $74 million) provides stability while expansion into sewer monitoring through the SmartCover acquisition broadens market opportunities. | technology | hardware-equipment-parts |
| SWKS | Skyworks Solutions, Inc. | 02/01/2026 | $55.76 | Live | Added | Technology | Semiconductors | Undervalued Tech with Strong Growth Potential | • Our ML engine identified Skyworks Solutions as a compelling buy opportunity based on its attractive valuation, strong market position, and promising growth trajectory. • The stock trades at a modest P/E ratio of 18.1 and just 61% of its 52-week high, while offering an exceptional 5.1% dividend yield – rare for a technology company. • Recent quarterly results show impressive execution, with revenue of $1.1 billion exceeding forecasts by 8.9% and sequential growth of 21% in mobile and 3% in broad markets. • The pending Qorvo acquisition could deliver up to 25% EPS accretion through cost synergies, while diversification into automotive (reaching record $65 million quarterly run rate) and IoT markets reduces reliance on smartphones. • With analyst fair value estimates of $78 suggesting ~40% upside potential, Skyworks offers an attractive combination of value, income, and growth opportunity. | technology | semiconductors |
| AMAT | Applied Materials, Inc. | 02/01/2026 | $322.32 | Live | Added | Technology | Semiconductors | Exceptional Growth in AI Semiconductor Market | • Applied Materials (AMAT) stands out for its impressive market performance with staggering 80% one-year and 38% three-month price returns, reflecting strong investor confidence. • The company is strategically positioned to benefit from the AI semiconductor revolution, with analysts projecting significant growth in wafer fab equipment spending (13% in 2026). • Strong financial fundamentals include robust operating margins (30%), healthy return on assets (19.8%), and consistent dividend growth (15%). • Multiple analyst upgrades (Deutsche Bank, Mizuho, KeyBanc) with price targets up to $390 signal continued bullish sentiment. • AMAT's technological leadership in critical next-gen chip architectures (Gate-All-Around transistors, advanced packaging) ensures sustainable growth as semiconductor manufacturers invest heavily in AI capabilities. | technology | semiconductors |
| NOW | ServiceNow, Inc. | 02/01/2026 | $117.01 | Live | Added | Technology | Software - Application | Strong Growth with AI-Powered Profitability | • Selected for outstanding performance in market leadership, growth trajectory, and profitability metrics • Maintains impressive 20.9% revenue growth with subscription revenue reaching $3.47 billion in Q4 2025, demonstrating sustained demand for its workflow automation platform • Exceptional profitability with 77.5% gross margin and 39.6% EBITDA growth, showing strong operational efficiency • Strategic acquisitions (Armis for $7.75 billion, Veza) significantly expand market opportunity in security and risk management • AI-focused strategy on track to deliver $1 billion in annual contract value by 2026, with AI Control Tower meeting its annual quota in just two months • 98% customer renewal rate confirms strong market position and product stickiness despite increasing competition • Analysts project fair value between $157-195, suggesting significant upside from current $116 price level | technology | software-application |
| ROP | Roper Technologies, Inc. | 02/01/2026 | $371.23 | Live | Added | Industrials | Industrial - Machinery | Strong Growth at Attractive Valuation | • Our ML engine identified Roper Technologies as a compelling buy opportunity based on market performance, exceptional growth metrics, and attractive valuation. • Revenue shows impressive growth trajectory (12.3% LTM, 9.7% quarterly) with robust profit margins (69.2% gross profit margin, 28.3% operating margin). • Strong financial health evidenced by 11.5% EBITDA growth and 10.3% dividend growth, demonstrating consistent value creation. • Current price represents significant value opportunity, with analyst fair value estimates ($462.19) suggesting substantial upside potential from current levels. • Raymond James maintains a Strong Buy rating, noting the stock trades at a 40% discount to historical peer relationships, with expectations of share buybacks exceeding $1 billion in 2026. • $6 billion M&A capacity positions the company for continued strategic acquisitions to complement organic growth. | industrials | industrial-machinery |
| CRM | Salesforce, Inc. | 02/01/2026 | $212.29 | Live | Added | Technology | Software - Application | AI-Powered Growth with Elite Profitability | • Salesforce was selected by our ML engine for its exceptional market performance, sustainable growth, and impressive profitability metrics in the enterprise software space. • Despite recent price pullbacks, Salesforce shows significant upside potential with analyst targets averaging $328.52 (53% above current price), backed by a recent $5.6 billion U.S. Army contract win. • Growth remains robust with 9% year-over-year revenue increase to $10.26 billion in Q3 2026, while its AI-focused Agentforce platform is growing at an astounding 330% YoY, reaching $540 million in ARR. • Profitability metrics are stellar, with a 77.7% gross margin and 35.5% non-GAAP operating margin, driving free cash flow up 22% to $2.2 billion. • The successful early completion of the Informatica acquisition positions Salesforce to further capitalize on the growing demand for integrated AI and data management solutions. | technology | software-application |
| INTU | Intuit Inc. | 02/01/2026 | $498.92 | Live | Added | Technology | Software - Application | Strong Growth with AI-Powered Profitability | • Selected by our ML engine due to outstanding performance in market potential, growth metrics, and profitability indicators • Impressive financial results with 17% revenue growth, 30% EBITDA growth, and excellent 80% gross margin - demonstrating both strong execution and pricing power • Strategic AI integration across product portfolio driving exceptional segment growth: QuickBooks Online mid-market up 40%, TurboTax Live surging 47%, and Credit Karma accelerating 32% • Current price (~$503) represents a compelling entry point at just 61% of 52-week high, with significant upside potential based on analyst fair value targets of $783 • Recent strategic partnership with Circle to integrate stablecoin technology opens new growth avenues across its platform serving 100 million customers | technology | software-application |
| ORCL | Oracle Corporation | 02/01/2026 | $164.58 | Live | Added | Technology | Software - Infrastructure | Cloud & AI Powerhouse Delivering Growth | • Oracle's selection stems from exceptional performance across market positioning, growth metrics, and profitability indicators. • Cloud business is booming with infrastructure revenue surging 54% and overall cloud revenue up 27%, positioning Oracle as a key player in the rapidly expanding AI infrastructure market. • Remaining Performance Obligations skyrocketed 359% to $455 billion, including a reported $300 billion OpenAI deal, demonstrating extraordinary future revenue potential. • Strong profitability metrics (68.5% gross margin, 31.8% operating margin) prove Oracle can maintain healthy profits while investing aggressively in growth. • Strategic AI partnerships and data center expansions, backed by a $50 billion capital expenditure forecast for fiscal 2026, create a compelling foundation for continued long-term growth. | technology | software-infrastructure |
| SNDK | Sandisk Corporation | 02/01/2026 | $199.33 | 189.1% | Removed | Technology | Hardware, Equipment & Parts | Extreme valuation after extraordinary rally | • Rotated out due to relative valuation concerns following exceptional price surge of 1500% over past year. • Stock's P/E ratio of 144.5 substantially exceeds sector norms, while trading at a price-to-book ratio of 8.3, signaling potential overvaluation despite strong earnings beat. • Extreme price volatility (143% in one month, 189% in three months) increases portfolio risk profile, particularly as the stock approaches its 52-week high (85% of maximum). • Negative EPS of -$7.15 and concerning negative net margin (-22.37%) contrast sharply with share price appreciation, creating valuation disconnects. • Impressive revenue growth (61% quarterly) and strategic positioning in AI markets remain positive factors. This change reflects portfolio rotation, not a sell signal. | technology | hardware-equipment-parts |
| ON | ON Semiconductor Corporation | 02/01/2026 | $39.60 | 51.2% | Removed | Technology | Semiconductors | Relative value and revenue concerns | • ON Semiconductor rotated out as other semiconductor opportunities offer more compelling value-performance combinations. • Revenue declined 16.1% year-over-year while EBITDA fell 31.4%, reflecting challenging conditions in automotive and industrial markets. • Current P/E of 79.5 appears elevated despite forward P/E of 22, with negative PEG ratio (-0.93) raising growth sustainability questions. • Price of $62.20 sits at 89.6% of its 52-week high and matches InvestingPro's fair value estimate of $62.30, suggesting limited near-term upside. • Positive developments (GlobalFoundries GaN partnership, $6 billion buyback program, and analyst upgrades) remain supportive longer-term. This change reflects portfolio rotation, not a sell signal. | technology | semiconductors |
| AMKR | Amkor Technology, Inc. | 02/01/2026 | $37.74 | 28.3% | Removed | Technology | Semiconductors | Valuation stretch after exceptional rally | • Rotated out due to relative valuation concerns following extraordinary stock appreciation of ~99% over one year. • P/E ratio of 39x significantly exceeds both analyst fair value target ($44.75) and InvestingPro fair value ($38.91), suggesting limited near-term upside potential. • UBS recently downgraded from Buy to Neutral citing 250% appreciation since April 2025 has fully priced in recovery drivers. • Potential headwinds include multi-year negative free cash flow from $7B Arizona facility investment and projected 12.6% earnings decline year-over-year. • Company maintains solid fundamentals with strong Q3 results (EPS $0.51 vs $0.43 expected) and positioning to benefit from AI growth through TSMC's CoWoS demand. This change reflects portfolio rotation, not a sell signal. | technology | semiconductors |
| CHKP | Check Point Software Technologies Ltd. | 02/01/2026 | $187.05 | -4.0% | Removed | Technology | Software - Infrastructure | Lagging returns amid market volatility | • Rotated out due to relative underperformance compared to other cybersecurity opportunities in our model • Stock has experienced significant negative returns across multiple timeframes: -17.66% over one year, -8.26% over three months, and currently trading at just 76.6% of its 52-week high • Recent China ban on US and Israeli cybersecurity software created additional headwinds, with shares declining in January 2026 • Current P/E ratio of 19.5 appears fully valued given conservative growth projections (6% for Q4 2025, 8% for FY2026) • Company maintains strong fundamentals with impressive 88% gross margins and recent earnings beat ($3.94 vs $2.45 forecast) • This change reflects portfolio rotation, not a sell signal | technology | software-infrastructure |
| NTAP | NetApp, Inc. | 02/01/2026 | $112.27 | -13.8% | Removed | Technology | Computer Hardware | Market weakness amid valuation concerns | • NetApp was rotated out as our model found marginally stronger alternatives within the technology sector. • Recent market performance has been concerning, with the stock down ~18% over three months and ~19% over one year, now trading at just 75% of its 52-week high. • Valuation metrics appear stretched relative to growth prospects, with a PEG ratio of 2.8 and an elevated Price/Book ratio of 19.4. • Morgan Stanley's January downgrade (to Underweight with $89 target) cited risks of earnings revisions, margin contraction, and reduced enterprise spending on storage hardware. • Despite challenges, NetApp maintains strong fundamentals with a robust 70% gross margin and solid earnings performance, beating Q2 expectations with $2.05 EPS (vs. $1.89 forecast). This change reflects portfolio rotation, not a sell signal. | technology | computer-hardware |
| ADSK | Autodesk, Inc. | 02/01/2026 | $301.34 | -16.1% | Removed | Technology | Software - Application | Valuation concerns amid market underperformance | • Autodesk was rotated out of our strategy as other opportunities show stronger relative positioning in our current market environment. • Stock has significantly underperformed, with negative returns across all timeframes (-14.57% 1-month, -16.08% 3-month, -18.78% 1-year), and is trading at just ~77% of its 52-week high. • Valuation metrics remain elevated despite price declines, with a P/E ratio of ~49x and a concerning PEG ratio of ~20x, suggesting overvaluation relative to growth. • Recent 9% workforce reduction (~1,350 employees) adds operational uncertainty amid management's acknowledgment of an "uncertain macroeconomic backdrop." • Company maintains strong fundamentals with excellent 92% gross margins and healthy revenue growth of ~16%, suggesting long-term potential remains intact. This change reflects portfolio rotation, not a sell signal. | technology | software-application |
| ENTG | Entegris, Inc. | 01/01/2026 | $76.29 | 10.4% | Removed | Technology | Semiconductors | Valuation concerns amid margin pressure | • Rotated out as other semiconductor opportunities present more favorable risk-reward profiles. • Stock has underperformed with a -14.6% return over the past year, trading at 76% of its 52-week high, while recent revenue remained flat year-over-year. • Valuation appears stretched with a P/E of 44.4 and trading above InvestingPro's fair value estimate of $80.1 (current price ~$86.7). • Recent Goldman Sachs downgrade to "Sell" highlights concerns about fundamentals lagging industry peers despite expected wafer start recovery in 2026. • Company still managing elevated debt levels from its 2022 CMC Materials acquisition, though it generated record free cash flow of $191 million last quarter. • This change reflects portfolio rotation, not a sell signal. | technology | semiconductors |
| ADBE | Adobe Inc. | 01/01/2026 | $322.85 | 8.4% | Removed | Technology | Software - Infrastructure | Lagging returns amid heightened competition | • Adobe rotated out as our ML model identified stronger alternatives in the software space. • Stock performance has weakened significantly, with a -21.29% 1-year return and -10.74% 6-month return, trading at just 75% of its 52-week high. • Valuation metrics (P/E ratio of ~21) appear stretched relative to slowing growth trajectory, with revenue growth of 10.5% year-over-year. • Recent legal challenges create uncertainty, including DOJ lawsuit over subscription practices and class action regarding AI training methods. • Despite strong fundamentals (89% gross margin) and consistent earnings beats, heightened competition from AI-powered alternatives and analyst downgrades have dampened investor sentiment. • This change reflects portfolio rotation, not a sell signal. | technology | software-infrastructure |
| QLYS | Qualys, Inc. | 01/01/2026 | $143.16 | -7.2% | Removed | Technology | Software - Infrastructure | Performance lags amid valuation concerns | • Rotated out due to weaker relative metrics compared to other opportunities in our ML portfolio. • Stock performance has lagged with negative returns across multiple timeframes: -4.8% (1 week), -7.2% (1 month), and -5.2% (1 year), despite the company beating recent earnings estimates. • Valuation appears stretched at 25.7x P/E and 9.0x price-to-book ratio, particularly given modest revenue growth of ~10%. • Volatility concerns stem from recent executive turnover (Chief Revenue Officer departure), ongoing shareholder litigation investigation, and reported Microsoft partnership termination. • Company maintains solid fundamentals with impressive 82.5% gross margins, strong cash position, and raised guidance for FY2025 – suggesting long-term potential remains intact. • This change reflects portfolio rotation, not a sell signal. | technology | software-infrastructure |