FREQUENCY ELECTRONICS INC (NASDAQ:FEIM) – A Strong Contender for CANSLIM Investors

Frequency Electronics Inc (NASDAQ:FEIM) has surfaced as a compelling candidate for investors following the CANSLIM strategy. The stock demonstrates strong earnings growth, high relative strength, and solid fundamentals, aligning well with the criteria outlined by William O’Neil’s system. Below, we examine why FEIM stands out.

Key CANSLIM Criteria Met by FEIM

• Earnings Growth (C & A): FEIM reported a staggering 15,900% year-over-year EPS growth for the latest quarter, far exceeding the CANSLIM threshold of 20%. Revenue growth also impressed at 38.1%. Over the past three years, EPS has grown at an average annual rate of 103.9%, reinforcing sustained profitability.
• Relative Strength (L): With a ChartMill Relative Strength score of 95.31, FEIM outperforms nearly all stocks in the market, a hallmark of CANSLIM leaders.
• Institutional Sponsorship (I): Institutional ownership sits at 56.2%, below the 85% threshold, indicating room for further institutional accumulation.
• Debt-Free Balance Sheet (S): FEIM carries no debt, a rare and favorable trait that enhances financial stability.
• Strong Profitability (A): The company’s Return on Equity (ROE) of 44.6% reflects efficient capital use, well above the 10% minimum suggested by CANSLIM.

Technical Strength

FEIM’s technical rating of 10/10 reflects a robust uptrend in both short and long-term timeframes. The stock is trading near the upper end of its 52-week range, with clear support levels at $16.93 and $15.34. Resistance lies between $18.64-$19.42, presenting potential breakout opportunities.

Valuation and Dividend

Despite its growth, FEIM remains reasonably valued with a P/E ratio of 7.68, significantly below industry peers. The stock also offers a 5.23% dividend yield, adding an income component rare for high-growth stocks.

For a deeper dive, review the full fundamental analysis and technical report.

Our CANSLIM High Growth screener lists more stocks matching these criteria and is updated daily.

Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.