Piotroski’s Best and Worst Large Cap Stocks

By Joel Stonington - 2011-12-06T01:37:02Z

Photograph by Jake Schoellkopf/Bloomberg News

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Piotroski's Best: KLA-Tencor

Business: Yield-management and process-monitoring systems for the semiconductor industry.

Piotroski Score: 9

KLA-Tencor (KLAC) reported that its return on assets increased to 18.51 percent in its fiscal 2011 year. That compares to 5.65 percent in 2010. The company's gross margin rose from 55.2 percent in 2010 to 60.34 percent in 2011.

Outlook for the Company:

Bull Case: KLA-Tencor has forecast that orders will rise by 45% next year, driven by its foundry business, according to Goldman Sachs.

Bear Case: KLA says that logic chips will be just 9 percent of fourth-quarter bookings, which implies that one of its big customers, Intel, is cutting capital expenditures, according to Goldman Sachs.