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

FUTU HOLDINGS LTD-ADR (NASDAQ:FUTU) stands out as a potential candidate for investors following the CANSLIM strategy. The company, which provides digitalized financial services, meets several key criteria of the CANSLIM system, including strong earnings growth, high relative strength, and solid profitability metrics. Below, we examine why FUTU aligns with this growth-focused approach.

Why FUTU Fits the CANSLIM Criteria

• Earnings Growth (C & A Criteria): FUTU reported a 96.4% year-over-year EPS growth in its latest quarter, far exceeding the CANSLIM minimum of 20%. Revenue growth was equally impressive at 81.1%. Over the past three years, EPS has grown at an annualized rate of 28.8%, reinforcing consistent expansion.
• New Highs & Relative Strength (N & L Criteria): The stock is trading near its 52-week high and boasts a relative strength of 97.6, meaning it outperforms nearly 98% of the market. This aligns with CANSLIM’s preference for market-leading stocks.
• Institutional Sponsorship (I Criteria): Institutional ownership sits at 43.2%, well below the 85% threshold, suggesting room for further institutional accumulation.
• Strong Profitability (A Criteria): FUTU’s Return on Equity (ROE) of 21.6% reflects efficient capital use, while its debt-to-equity ratio of 0.36 indicates a healthy balance sheet.

Technical Strength

FUTU’s technical rating is a perfect 10/10, with both short-term and long-term trends positive. The stock has surged 160.6% over the past year, demonstrating strong momentum. However, the recent rapid rise suggests waiting for a pullback could offer a better entry point.

Valuation & Risks

While FUTU’s P/E ratio of 25.7 is above its industry average, its strong growth prospects justify the premium. Investors should monitor its financial health, as its Altman-Z score indicates some risk.

For more details, review the full fundamental analysis and technical report.

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Disclaimer

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