FUTU HOLDINGS LTD-ADR (NASDAQ:FUTU) – A Strong Contender for CANSLIM Investors

FUTU HOLDINGS LTD-ADR (NASDAQ:FUTU) was identified by our CANSLIM stock screener as a potential candidate for growth-focused investors. The company, which provides digitalized financial services, meets several key criteria of the CANSLIM strategy, including strong earnings growth, high relative strength, and improving fundamentals. Below, we examine why FUTU stands out.

Key CANSLIM Criteria Met by FUTU

• Earnings Growth (C & A Criteria): FUTU reported a 96.4% year-over-year EPS growth in its most recent quarter, far exceeding the CANSLIM minimum of 20%. Revenue growth was also strong at 81.1%. Over the past three years, EPS has grown at an average annual rate of 28.8%, indicating sustained profitability.
• Relative Strength (L Criteria): With a ChartMill Relative Strength score of 93.85, FUTU outperforms nearly 94% of the market, a hallmark of market leadership.
• Institutional Sponsorship (I Criteria): Institutional ownership stands at 43.2%, well below the 85% threshold, suggesting room for further institutional accumulation.
• Debt Management (S Criteria): The company maintains a Debt/Equity ratio of 0.36, indicating a conservative balance sheet.
• Profitability (A Criteria): FUTU’s Return on Equity (ROE) of 21.6% is well above the industry average, reinforcing its efficient use of capital.

Technical and Fundamental Outlook

• Technical Analysis: FUTU’s stock is in a strong uptrend, with both short-term and long-term trends positive. It trades near the upper end of its 52-week range, though slightly below its peak.
• Fundamental Health: While FUTU scores well on growth and profitability, its Altman-Z score of 1.07 raises some solvency concerns. However, its liquidity metrics remain stable.

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

Our CANSLIM High Growth screener lists more high-growth stocks and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.