Practical Islamic Finance

Where Halal wealth is built.

PIF Reviewed Stock List

COMPANY NAME COMFORT LEVEL FULL REPORT
2U (TWOU) Comfortable   Read full report
3D Systems (DDD) Comfortable   Read full report
3M (MMM) Comfortable   Read full report
ABBOTT (ABT) Comfortable   Read full report
AbCellera Biologics (ABCL) Comfortable   Read full report
Abiomed (ABMD) Comfortable   Read full report
Accenture (ACN) Uncomfortable   Read full report
Accolade (ACCD) Comfortable   Read full report
Adaptive Biotechnologies (ADPT) Comfortable   Read full report
Adobe (ADBE) Comfortable   Read full report
Advanced Micro Devices (AMD) Comfortable   Read full report
Agenus (AGEN) Uncomfortable   Read full report
Agilent Technologies (A) Comfortable   Read full report
Alphabet (GOOG/GOOGL) Uncomfortable   Read full report
Amazon (AMZN) Questionable   Read full report
Amcor (AMCR) Comfortable   Read full report
Amgen (AMGN) Uncomfortable   Read full report
Arista Networks (ANET) Comfortable   Read full report
Array Technologies (ARRY) Comfortable   Read full report
Asana (ASAN) Comfortable   Read full report
ASML Holding (ASML) Comfortable   Read full report
Atea Pharmaceuticals (AVIR) Comfortable   Read full report
Atlassian (TEAM) Questionable   Read full report
Aurinia Pharmaceuticals (AUPH) Comfortable   Read full report
Bank of America (BAC) Uncomfortable   Read full report
Beam Therapeutics Inc. (BEAM) Comfortable   Read full report
Beam Therapeutics Inc. (BEAM) Comfortable   Read full report
Beyond Meat (BYND) Comfortable   Read full report
Bitfarms (BITF) Uncomfortable   Read full report
BlackBerry (BB) Comfortable   Read full report
Bristol-Myers Squibb (BMY) Comfortable   Read full report
Broadcom (AVGO) Uncomfortable   Read full report
CareDx (CDNA) Questionable   Read full report
Carvana (CVNA) Uncomfortable   Read full report
Cassava Sciences (SAVA) Comfortable   Read full report
Celsius Holdings (CELH) Comfortable   Read full report
Ceridian HCM Holding (CDAY) Comfortable   Read full report
ChargePoint Holdings (CHPT) Comfortable   Read full report
Church & Dwight (CHD) Comfortable   Read full report
Cisco Systems (CSCO) Comfortable   Read full report
Citius Pharmaceuticals (CTXR) Comfortable   Read full report
Citrix Systems (CTXS) Comfortable   Read full report
CleanSpark (CLSK) Comfortable   Read full report
Codexis (CDXS) Comfortable   Read full report
Coinbase (COIN) Uncomfortable   Read full report
Corning Inc (GLW) Uncomfortable   Read full report
Corsair Gaming (CRSR) Comfortable   Read full report
Coursera (COUR) Comfortable   Read full report
CRISPR Therapeutics (CRSP) Comfortable   Read full report
Crocs (CROX) Comfortable   Read full report
CrowdStrike (CRWD) Comfortable   Read full report
Danaher (DHR) Comfortable   Read full report
Dentsply Sirona (XRAY) Comfortable   Read full report
Desktop Metal (DM) Comfortable   Read full report
DocuSign (DOCU) Uncomfortable   Read full report
Dropbox (DBX) Comfortable   Read full report
Duolingo (DUOL) Comfortable   Read full report
Dynatrace Inc (DT) Comfortable   Read full report
eBay (EBAY) Comfortable   Read full report
Eli Lilly (LLY) Comfortable   Read full report
Emerson Electric (EMR) Comfortable   Read full report
Enphase (ENPH) Comfortable   Read full report
Enphase Energy Inc. (ENPH) Comfortable   Read full report
Estee Lauder (EL) Uncomfortable   Read full report
Etsy (ETSY) Questionable   Read full report
Exact Sciences (EXAS) Comfortable   Read full report
ExOne (XONE) Comfortable   Read full report
ExxonMobil (XOM) Uncomfortable   Read full report
F5 Networks (FFIV) Comfortable   Read full report
Fastenal (FAST) Comfortable   Read full report
Fate Therapeutics (FATE) Comfortable   Read full report
Fortinet (FTNT) Comfortable   Read full report
FTC Solar (FTCI) Comfortable   Read full report
Garmin (GRMN) Comfortable   Read full report
General Mills (GIS) Uncomfortable   Read full report
Genuine Parts Company (GPC) Comfortable   Read full report
Ginkgo Bioworks (DNA) Comfortable   Read full report
GoPro (GPRO) Comfortable   Read full report
Grainger (GWW) Comfortable   Read full report
Helen of Troy (HELE) Comfortable   Read full report
Hut 8 Mining Corp (HUT) Comfortable   Read full report
IBM (IBM) Comfortable   Read full report
Ichor Systems (ICHR) Comfortable   Read full report
Illumina (ILMN) Comfortable   Read full report
Insperity (NSP) Comfortable   Read full report
Insulet Corporation (PODD) Uncomfortable   Read full report
Intel (INTC) Uncomfortable   Read full report
Intellia Therapeutics (NTLA) Comfortable   Read full report
International Paper Company (IP) Comfortable   Read full report
Intuit (INTU) Uncomfortable   Read full report
Intuitive Surgical (ISRG) Comfortable   Read full report
Ionis Pharmaceuticals (IONS) Comfortable   Read full report
iRobot (IRBT) Comfortable   Read full report
Jaguar Health (JAGX) Uncomfortable   Read full report
Johnson & Johnson (JNJ) Comfortable   Read full report
Lear Corporation (LEA) Comfortable   Read full report
Legget & Platt (LEG) Uncomfortable   Read full report
Littelfuse (LFUS) Comfortable   Read full report
Logitech (LOGI) Comfortable   Read full report
Lovesac (LOVE) Comfortable   Read full report
Lucid Group (LCID) Comfortable   Read full report
Marathon Digital Holdings (MARA) Comfortable   Read full report
McCormick & Company (MKC) Comfortable   Read full report
Medifast (MED) Uncomfortable   Read full report
MedPace Holdings (MEDP) Comfortable   Read full report
Merck (MRK) Comfortable   Read full report
Meta Platforms (FB) Uncomfortable   Read full report
Micron (MU) Comfortable   Read full report
Microsoft (MSFT) Comfortable   Read full report
Moderna (MRNA) Comfortable   Read full report
MP Materials (MP) Comfortable   Read full report
Neoleukin Therapeutics Inc (NLTX) Comfortable   Read full report
New Relic (NEWR) Comfortable   Read full report
NortonLifeLock (NLOK) Uncomfortable   Read full report
Novartis (NVS) Comfortable   Read full report
Novavax (NVAX) Comfortable   Read full report
Nucor (NUE) Comfortable   Read full report
NVIDIA (NVDA) Comfortable   Read full report
NVIDIA Corporation (NVDA) Comfortable   Read full report
Oracle (ORCL) Uncomfortable   Read full report
Pacific Biosciences (PACB) Comfortable   Read full report
Palantir (PLTR) Uncomfortable   Read full report
Paypal (PYPL) Uncomfortable   Read full report
Peloton (PTON) Comfortable   Read full report
PetMed Express (PETS) Comfortable   Read full report
Pfizer (PFE) Comfortable   Read full report
Piedmont Lithium (PLL) Comfortable   Read full report
Powerledger (POWR) Comfortable   Read full report
Procter & Gamble (PG) Uncomfortable   Read full report
Progyny (PGYN) Uncomfortable   Read full report
Qualcomm (QCOM) Comfortable   Read full report
Realty Income (O) Uncomfortable   Read full report
Regeneron (REGN) Comfortable   Read full report
Renewable Energy Group (REGI) Comfortable   Read full report
Rhodium Enterprises (RHDM) Uncomfortable   Read full report
Riot Blockchain (RIOT) Comfortable   Read full report
Rivian (RIVN) Comfortable   Read full report
Robinhood (HOOD) Uncomfortable   Read full report
Roblox (RBLX) Questionable   Read full report
Roche (RHHBY) Comfortable   Read full report
Ryder System (R) Comfortable   Read full report
Salesforce (CRM) Comfortable   Read full report
Shift Technologies (SFT) Comfortable   Read full report
Shopify (SHOP) Comfortable   Read full report
Smile Direct Club (SDC) Uncomfortable   Read full report
Snowflake (SNOW) Comfortable   Read full report
Stitch Fix (SFIX) Comfortable   Read full report
Stryker (SYK) Comfortable   Read full report
Sunnova Energy (NOVA) Uncomfortable   Read full report
Sunrun (RUN) Uncomfortable   Read full report
Taiwan Semiconductor (TSM) Comfortable   Read full report
Tattooed Chef (TTCF) Comfortable   Read full report
Teladoc (TDOC) Comfortable   Read full report
Tesla (TSLA) Comfortable   Read full report
Texas Instruments (TXN) Comfortable   Read full report
The Home Depot (HD) Comfortable   Read full report
The Honest Company (HNST) Comfortable   Read full report
Trimble (TRMB) Comfortable   Read full report
Twilio (TWLO) Comfortable   Read full report
Twist Bioscience (TWST) Comfortable   Read full report
UiPath (PATH) Comfortable   Read full report
Ulta Beauty (ULTA) Comfortable   Read full report
Ultra Clean Holdings (UCTT) Comfortable   Read full report
UPS (UPS) Comfortable   Read full report
Upwork (UPWK) Comfortable   Read full report
Veeva Systems (VEEV) Comfortable   Read full report
Verisign (VRSN) Uncomfortable   Read full report
Verizon (VZ) Comfortable   Read full report
Vertex Pharmaceuticals (VRTX) Comfortable   Read full report
Whirlpool (WHR) Uncomfortable   Read full report
Yala Group (YALA) Questionable   Read full report
Zillow (Z/ZG) Uncomfortable   Read full report
Zoom (ZM) Comfortable   Read full report
Zymergen (ZY) Comfortable   Read full report

PIF’s methodology for rating stocks from a halal perspective 

The term Maqasid al-Shariah can loosely be translated as “the purposes of Islamic Law”. 

On the purposes of Islamic Law, Allah swt says:

‏وَمَآ أَرْسَلْنَكَ إِلَّا رَحْمَةًۭ لِّلْعَلَمِينَ

We have not sent you [O’ Muhammad] except out of mercy to everyone and everything.

-The Holy Quran [al-Anbiya’ 21:107]

With this in mind it follows that halal investments are those which support the purpose of spreading mercy in the world.

Consider a company such as iRobot (IRBT). This company has created a product that automates repetitive cleaning tasks, freeing up people’s time while providing a cleaner environment for them to live in. As such it is providing relief to its users and improving the quality of their lives. Accordingly, this is a company PIF would be Comfortable investing in from a halal perspective.

A contrasting example would be that of DraftKings (DKNG), a sport betting company which profits from the competing bets of gamblers (one bettor’s win is another bettor’s loss).  Rather than increasing mercy in this world, DraftKings is profiting from an activity that spreads hatred and animosity.

Allah swt says:

إِنَّمَا يُرِيدُ الشَّيْطَانُ أَن يُوقِعَ بَيْنَكُمُ الْعَدَاوَةَ وَالْبَغْضَاءَ فِي الْخَمْرِ وَالْمَيْسِرِ وَيَصُدَّكُمْ عَن ذِكْرِ اللَّهِ وَعَنِ الصَّلَاةِ فَهَلْ أَنتُم مُّنتَهُونَ

Satan desires to create enmity and hatred amongst you through intoxicants and gambling and to stop you from praying and remembering Allah. So will you abstain from these things?” [Quran 5:91]

In order to have a consistent process for determining whether a company is actually serving the overarching purpose of sharia which is spreading mercy in the world,

Practical Islamic Finance (PIF) asks the following three questions to rate stocks from a Halal perspective

1. How does the company generate revenue? 

Ideally a company does not generate any income from prohibited (haram) activities such as gambling, pork, alcohol or interest. However, this is not always the case. In such instances, one must consider the quantity of haram revenue compared to overall revenue 

As a general rule of thumb, we should be able to describe the revenue the company generates from non-halal activities as trivial.

To determine what is trivial, many commentators have agreed on a 5% limit. That is, 5% of a company’s revenue can come from non-halal activities but not more.

While we think this is a reasonable rule of thumb, it’s important to keep in mind that this is not a hard-and-fast law in Islam.

2. Does the company rely on Riba to operate?

Riba (interest on debt) is prohibited in Islam because of the high cost it has on everyone and everything that is affected by it.

Accordingly, we should seek to invest in companies that do not rely on interest to operate. 

To verify this, and in line with our 5% rule, we look for companies that have an Interest Income to Revenue (Interest Income/Revenue) and Interest Expense to Total Operating Expense (Interest Expense/Total Operating Expense) of less than 5%.  

PIF is unique in this approach. Most other standards in the Islamic Finance Industry look for the debt-to-equity (debt/equity) ratio to be less than 33% or less than 30%. 

Since Islam prohibits interest, not debt, a company that pays no interest on its debt but has a 100% debt/equity ratio should be “comfortable” to invest in. 

However, such a company would fail the industry debt/equity standardbut not the PIF standard which looks at interest expense and interest revenue.

An example of a type of company that typically fails this check are Real Estate Investment Trusts (REITs).  This is because their ratios of interest income and interest expense to overall revenue and total expense are typically high, suggesting a reliance on riba and making them uncomfortable to invest in from a halal perspective.

3. What are the Economic, Social and Government (ESG) impacts of the company’s operations?

This check involves assessing the company’s impact on everyone and everything it comes into contact with such as the environment, suppliers and employees. 

Systematic violations and infractions that have not been remedied may cause a company to fail this standard. 

One example of an obvious ESG red flag is the use of slave labor in a company’s supply chain. In recent times many companies have been found to employ Uyghur muslim slave laborers in their supply chains in China. This is an unacceptable infraction that would render the company uncomfortable for PIF to invest in from a halal perspective.

The outcome of applying our methodology is one of the following three ratings being given to a stock: 

Comfortable  – Companies we are comfortable investing in from a halal perspective

Uncomfortable – Companies we are uncomfortable investing in from a halal perspective

Questionable – Companies we are unsure of. That is, we view the arguments for a Comfortable or Uncomfortable rating as equally strong.

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