10 Best Ben Graham Heatmap Picks for February 2026
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Market Overview & Selection Criteria
The current market landscape shows strength in technology and healthcare sectors amid ongoing innovation and economic shifts, with select financial names providing stability. ValueSense selected these 10 top stock picks using its proprietary intrinsic value methodology, focusing on Quality rating, ROIC, revenue growth, and comparisons to intrinsic value estimates. Stocks were drawn from a Ben Graham-inspired heatmap, prioritizing high-quality companies with strong FCF margins, low Total Debt to Equity where possible, and compelling 1Y Returns. This educational analysis highlights undervalued opportunities across semiconductors, biotech, banking, and enterprise software for diversified stock watchlist consideration.
Featured Stock Analysis
Stock #1: NVIDIA Corporation (NVDA)
| Metric | Value |
|---|---|
| Market Cap | $4,676.7B |
| Quality Rating | 8.2 |
| Intrinsic Value | $85.9 |
| 1Y Return | 53.3% |
| Revenue | $187.1B |
| Free Cash Flow | $77.3B |
| Revenue Growth | 65.2% |
| FCF margin | 41.3% |
| Gross margin | 70.1% |
| ROIC | 161.5% |
| Total Debt to Equity | 9.1% |
Investment Thesis
NVIDIA Corporation (NVDA) stands out with a Quality rating of 8.2 and an exceptional ROIC of 161.5%, reflecting superior capital efficiency in the semiconductor space. The company reports massive Revenue of $187.1B and Free Cash Flow of $77.3B, driven by a stellar Revenue growth of 65.2% and FCF margin of 41.3%. With a Gross margin of 70.1% and Market Cap of $4,676.7B, alongside a 1Y Return of 53.3%, NVDA demonstrates robust profitability. ValueSense's Intrinsic value estimate of $85.9 suggests potential undervaluation relative to growth trajectory, making it a key pick for tech-focused stock analysis.
This profile positions NVDA as a leader in high-performance computing, with metrics underscoring sustainable expansion despite its massive scale.
Key Catalysts
- Explosive 65.2% Revenue growth fueling AI and GPU demand
- Industry-leading 161.5% ROIC indicating efficient reinvestment
- Strong 41.3% FCF margin supporting R&D and dividends
- Minimal 9.1% Total Debt to Equity for financial flexibility
Risk Factors
- High Market Cap exposure to market volatility
- Dependence on tech sector cycles
- Potential margin pressure from competition
Stock #2: Taiwan Semiconductor Manufacturing Company Limited (TSM)
| Metric | Value |
|---|---|
| Market Cap | $1,730.0B |
| Quality Rating | 8.2 |
| Intrinsic Value | $484.8 |
| 1Y Return | 58.8% |
| Revenue | NT$3,818.9B |
| Free Cash Flow | NT$1,019.8B |
| Revenue Growth | 31.9% |
| FCF margin | 26.7% |
| Gross margin | 59.9% |
| ROIC | 38.2% |
| Total Debt to Equity | 18.2% |
Investment Thesis
Taiwan Semiconductor Manufacturing Company Limited (TSM) earns a Quality rating of 8.2, with Revenue of NT$3,818.9B and Free Cash Flow of NT$1,019.8B. Boasting 31.9% Revenue growth, 26.7% FCF margin, 59.9% Gross margin, and 38.2% ROIC, TSM supports a $1,730.0B Market Cap and 58.8% 1Y Return. The Intrinsic value of $484.8 highlights value potential in foundry leadership, ideal for TSM stock analysis in semiconductors.
TSM's metrics reflect its critical role in global chip production, balancing growth with operational excellence.
Key Catalysts
- Solid 31.9% Revenue growth from advanced node demand
- Healthy 38.2% ROIC for sustained innovation
- 26.7% FCF margin enabling capacity expansion
- Low 18.2% Total Debt to Equity for resilience
Risk Factors
- Geopolitical tensions in Taiwan
- Cyclical semiconductor industry
- Currency fluctuations with NT$ reporting
Stock #3: Eli Lilly and Company (LLY)
| Metric | Value |
|---|---|
| Market Cap | $928.7B |
| Quality Rating | 7.9 |
| Intrinsic Value | $276.8 |
| 1Y Return | 26.2% |
| Revenue | $59.4B |
| Free Cash Flow | $9,020.7M |
| Revenue Growth | 45.4% |
| FCF margin | 15.2% |
| Gross margin | 83.0% |
| ROIC | 36.0% |
| Total Debt to Equity | 178.2% |
Investment Thesis
Eli Lilly and Company (LLY) features a Quality rating of 7.9, $59.4B Revenue, and $9,020.7M Free Cash Flow, with 45.4% Revenue growth and 15.2% FCF margin. Exceptional 83.0% Gross margin and 36.0% ROIC back its $928.7B Market Cap and 26.2% 1Y Return. Intrinsic value at $276.8 points to healthcare value, central to LLY analysis.
LLY's pharma innovation drives these figures, positioning it strongly in biotech.
Key Catalysts
- Robust 45.4% Revenue growth from drug pipeline
- High 83.0% Gross margin in pharmaceuticals
- 36.0% ROIC signaling profitability
- Expanding market in obesity and diabetes treatments
Risk Factors
- Elevated 178.2% Total Debt to Equity
- Patent cliffs and regulatory hurdles
- Healthcare policy changes
Stock #4: Micron Technology, Inc. (MU)
| Metric | Value |
|---|---|
| Market Cap | $486.8B |
| Quality Rating | 8.2 |
| Intrinsic Value | $419.0 |
| 1Y Return | 348.5% |
| Revenue | $42.3B |
| Free Cash Flow | $17.3B |
| Revenue Growth | 45.4% |
| FCF margin | 40.9% |
| Gross margin | 45.3% |
| ROIC | 23.4% |
| Total Debt to Equity | 21.2% |
Investment Thesis
Micron Technology, Inc. (MU) scores an 8.2 Quality rating, with $42.3B Revenue, $17.3B Free Cash Flow, 45.4% Revenue growth, and 40.9% FCF margin. A 348.5% 1Y Return and $486.8B Market Cap underscore momentum, alongside 23.4% ROIC and Intrinsic value of $419.0 for memory chip MU stock picks appeal.
MU's surge ties to data center and AI memory demand.
Key Catalysts
- Phenomenal 348.5% 1Y Return from market recovery
- 45.4% Revenue growth in high-bandwidth memory
- Strong 40.9% FCF margin for tech upgrades
- Low 21.2% Total Debt to Equity
Risk Factors
- Commodity-like memory pricing cycles
- Competition from Samsung, SK Hynix
- Supply chain disruptions
Stock #5: Oracle Corporation (ORCL)
| Metric | Value |
|---|---|
| Market Cap | $474.9B |
| Quality Rating | 6.1 |
| Intrinsic Value | $160.5 |
| 1Y Return | -3.4% |
| Revenue | $61.0B |
| Free Cash Flow | ($13.2B) |
| Revenue Growth | 11.1% |
| FCF margin | (21.6%) |
| Gross margin | 78.0% |
| ROIC | 13.1% |
| Total Debt to Equity | 408.4% |
Investment Thesis
Oracle Corporation (ORCL) has a 6.1 Quality rating, $61.0B Revenue, but negative $13.2B Free Cash Flow and 21.6% FCF margin. 11.1% Revenue growth, 78.0% Gross margin, 13.1% ROIC, and -3.4% 1Y Return on $474.9B Market Cap frame its cloud transition, with Intrinsic value $160.5 for ORCL analysis.
Despite FCF challenges, margins suggest software strength.
Key Catalysts
- 11.1% Revenue growth in cloud services
- High 78.0% Gross margin
- Enterprise software stickiness
- Potential FCF turnaround
Risk Factors
- Negative $13.2B Free Cash Flow
- High 408.4% Total Debt to Equity
- Competition from AWS, Azure
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Stock #6: AbbVie Inc. (ABBV)
| Metric | Value |
|---|---|
| Market Cap | $392.2B |
| Quality Rating | 6.3 |
| Intrinsic Value | $302.5 |
| 1Y Return | 27.0% |
| Revenue | $59.6B |
| Free Cash Flow | $20.6B |
| Revenue Growth | 7.4% |
| FCF margin | 34.5% |
| Gross margin | 76.2% |
| ROIC | 12.0% |
| Total Debt to Equity | (2,645.0%) |
Investment Thesis
AbbVie Inc. (ABBV) rates 6.3 in Quality, with $59.6B Revenue, $20.6B Free Cash Flow, 7.4% Revenue growth, and 34.5% FCF margin. 76.2% Gross margin, 12.0% ROIC, 27.0% 1Y Return, and $392.2B Market Cap align with Intrinsic value $302.5, key for healthcare ABBV stock analysis.
Stable pharma metrics highlight defensive qualities.
Key Catalysts
- Solid 34.5% FCF margin for dividends
- 27.0% 1Y Return resilience
- Immunology portfolio growth
- High 76.2% Gross margin
Risk Factors
- Extreme 2,645.0% Total Debt to Equity
- Biosimilar competition
- Pipeline dependency
Stock #7: Bank of America Corporation (BAC)
| Metric | Value |
|---|---|
| Market Cap | $389.7B |
| Quality Rating | 6.3 |
| Intrinsic Value | $60.2 |
| 1Y Return | 16.5% |
| Revenue | $188.8B |
| Free Cash Flow | $35.6B |
| Revenue Growth | (1.9%) |
| FCF margin | 18.8% |
| Gross margin | 55.4% |
| ROIC | 16.7% |
| Total Debt to Equity | 120.7% |
Investment Thesis
Bank of America Corporation (BAC) holds a 6.3 Quality rating, $188.8B Revenue, $35.6B Free Cash Flow, 1.9% Revenue growth, and 18.8% FCF margin. 55.4% Gross margin, 16.7% ROIC, 16.5% 1Y Return, and $389.7B Market Cap support Intrinsic value $60.2 for banking BAC picks.
BAC offers scale in consumer and investment banking.
Key Catalysts
- Massive $35.6B Free Cash Flow
- 16.7% ROIC efficiency
- Diversified revenue streams
- Interest rate sensitivity upside
Risk Factors
- 1.9% Revenue growth slowdown
- 120.7% Total Debt to Equity
- Regulatory and recession risks
Stock #8: Cisco Systems, Inc. (CSCO)
| Metric | Value |
|---|---|
| Market Cap | $310.6B |
| Quality Rating | 6.6 |
| Intrinsic Value | $83.5 |
| 1Y Return | 29.5% |
| Revenue | $57.7B |
| Free Cash Flow | $13.1B |
| Revenue Growth | 8.9% |
| FCF margin | 22.6% |
| Gross margin | 65.0% |
| ROIC | 13.7% |
| Total Debt to Equity | 59.9% |
Investment Thesis
Cisco Systems, Inc. (CSCO) scores 6.6 Quality, $57.7B Revenue, $13.1B Free Cash Flow, 8.9% Revenue growth, 22.6% FCF margin. 65.0% Gross margin, 13.7% ROIC, 29.5% 1Y Return, $310.6B Market Cap, and Intrinsic value $83.5 suit networking CSCO analysis.
Cisco's networking dominance persists.
Key Catalysts
- Steady 8.9% Revenue growth
- 29.5% 1Y Return momentum
- 22.6% FCF margin for buybacks
- Cybersecurity and cloud shifts
Risk Factors
- Networking competition
- 59.9% Total Debt to Equity
- Slower enterprise spending
Stock #9: The Goldman Sachs Group, Inc. (GS)
| Metric | Value |
|---|---|
| Market Cap | $290.5B |
| Quality Rating | 6.3 |
| Intrinsic Value | $1,040.9 |
| 1Y Return | 47.8% |
| Revenue | $125.1B |
| Free Cash Flow | ($30.4B) |
| Revenue Growth | (1.8%) |
| FCF margin | (24.3%) |
| Gross margin | 45.7% |
| ROIC | N/A |
| Total Debt to Equity | 495.2% |
Investment Thesis
The Goldman Sachs Group, Inc. (GS) has 6.3 Quality, $125.1B Revenue, $30.4B Free Cash Flow, 1.8% Revenue growth, 24.3% FCF margin. 45.7% Gross margin, 47.8% 1Y Return, $290.5B Market Cap, and high Intrinsic value $1,040.9 flag investment banking value in GS stock picks. ROIC N/A noted.
Trading and advisory strength evident.
Key Catalysts
- Strong 47.8% 1Y Return
- Deal-making recovery potential
- Global footprint
- High Intrinsic value upside
Risk Factors
- Negative $30.4B Free Cash Flow
- 495.2% Total Debt to Equity
- Market volatility impact
Stock #10: International Business Machines Corporation (IBM)
| Metric | Value |
|---|---|
| Market Cap | $286.7B |
| Quality Rating | 6.8 |
| Intrinsic Value | $201.0 |
| 1Y Return | 19.5% |
| Revenue | $67.5B |
| Free Cash Flow | $12.3B |
| Revenue Growth | 7.6% |
| FCF margin | 18.2% |
| Gross margin | 58.8% |
| ROIC | 11.9% |
| Total Debt to Equity | 205.1% |
Investment Thesis
International Business Machines Corporation (IBM) rates 6.8 Quality, $67.5B Revenue, $12.3B Free Cash Flow, 7.6% Revenue growth, 18.2% FCF margin. 58.8% Gross margin, 11.9% ROIC, 19.5% 1Y Return, $286.7B Market Cap, Intrinsic value $201.0 for hybrid cloud IBM analysis.
IBM's transformation yields steady metrics.
Key Catalysts
- 7.6% Revenue growth in AI/cloud
- Positive $12.3B Free Cash Flow
- 19.5% 1Y Return stability
- Enterprise services demand
Risk Factors
- 205.1% Total Debt to Equity
- Legacy business drag
- Competition from hyperscalers
Portfolio Diversification Insights
These 10 best stocks blend technology (NVDA, TSM, MU, ORCL, CSCO, IBM ~60% allocation) with healthcare (LLY, ABBV ~20%) and financials (BAC, GS ~20%), reducing sector risk. High-quality leaders like NVDA and TSM pair with stable names like ABBV and BAC for balance. Cross-references show semiconductor synergy (NVDA/TSM/MU) and banking complementarity (BAC/GS), while healthcare adds defensive growth. This mix targets undervalued stocks with varied ROIC and margins for resilient stock watchlist construction.
Market Timing & Entry Strategies
Consider positions during sector pullbacks, such as tech dips post-earnings or financials amid rate cuts, using intrinsic value as entry benchmarks (e.g., NVDA near $85.9). Dollar-cost average into high-growth like MU/LLY over 3-6 months. Monitor Revenue growth and FCF quarterly; favor entries when 1Y Returns lag medians but Quality ratings exceed 7.0. Scale in based on Total Debt to Equity health for risk-managed investment opportunities.
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FAQ Section
How were these stocks selected?
Selected via ValueSense's Ben Graham heatmap using Quality rating, ROIC, intrinsic value, and growth metrics for top stock picks.
What's the best stock from this list?
NVDA leads with top Quality rating 8.2, 161.5% ROIC, and 65.2% Revenue growth, though all offer unique stock analysis merits.
Should I buy all these stocks or diversify?
Diversify across tech, healthcare, financials as shown in Portfolio Diversification Insights for balanced investment ideas.
What are the biggest risks with these picks?
Key risks include high debt (e.g., ABBV, ORCL), negative FCF (GS, ORCL), and sector cycles; review Risk Factors per stock.
When is the best time to invest in these stocks?
Time entries near intrinsic value levels during market dips, per Market Timing strategies, focusing on improving FCF margins.