FUTU HOLDINGS LTD-ADR (NASDAQ:FUTU) Stands Out as a Strong CAN SLIM Candidate

The CAN SLIM investment methodology, created by William O'Neil, joins fundamental and technical analysis to find high-growth market leaders. This methodical process assesses companies using seven main criteria represented by the acronym CAN SLIM, concentrating on earnings growth, institutional sponsorship, and market timing. The method looks for stocks showing solid quarterly and annual earnings growth, new products or services, and price strength compared to the wider market.

Current Quarterly Performance

FUTU HOLDINGS LTD-ADR (NASDAQ:FUTU) shows very good recent quarterly performance that fits well with the "C" criterion in CAN SLIM, which highlights current quarterly earnings and sales acceleration. The company's latest financial numbers show:

• Quarterly EPS growth of 103.67% compared to the same quarter last year
• Quarterly revenue growth of 69.73% year-over-year

These numbers are well above the CAN SLIM minimum level of 20-25% growth, pointing to good momentum in both profitability and business growth. The quickening earnings pattern indicates the company is building market presence and operational effectiveness.

Annual Earnings Strength

The "A" in CAN SLIM centers on annual earnings increases, needing steady yearly growth. FUTU displays good long-term profitability trends:

• Three-year EPS compound annual growth rate of 28.79%
• Return on Equity of 23.77%, notably higher than the 10% minimum requirement

These numbers show the company's capacity to maintain growth beyond temporary changes and productively use shareholder capital to create returns. The high ROE points to efficient management and competitive strengths within its industry.

Technical Strength and Market Position

CAN SLIM's technical parts are clearly seen in FUTU's present market profile. The "L" criterion highlights leadership quality, measured through relative strength:

• Relative strength rating of 94.32, showing the stock performs better than 94% of all market securities
• Good price performance with 101.74% gains over the past twelve months

The company's technical rating of 9 out of 10 shows very good price momentum and market acknowledgment. According to the technical analysis report, FUTU holds a positive long-term trend while presently trading in a consolidation pattern, possibly providing entry points for position traders.

Financial Health and Institutional Sponsorship

The screening criteria deal with financial stability and smart money interest through the "S" and "I" parts:

• Debt-to-equity ratio of 0.28, much lower than the maximum level of 2.0
• Institutional ownership of 44.45%, suitably below the 85% ceiling

The low debt level offers financial room and lowers risk during market declines, while the medium institutional ownership indicates potential for more institutional buying, which could give future buying pressure.

Complete Fundamental Assessment

FUTU's fundamental analysis report shows a mixed but mostly positive view with an overall rating of 6 out of 10. The company does very well in growth and profitability numbers but displays some issues in financial health. Important points include:

• Very good profit margins of 44.26% and operating margins of 55.82%
• Good revenue growth path with 66.35% year-over-year expansion
• Valuation numbers that seem acceptable considering the growth profile, with PEG ratios indicating payment for future growth

The company works in the digital brokerage area through its Futu NiuNiu platform, serving the changing financial services environment in China and internationally, fitting with the "N" criterion concentrating on newer companies and new services.

Market Context and Setup Quality

With the S&P 500 holding positive short and long-term trends, the general market direction backs the CAN SLIM method of investing during upward conditions. FUTU's technical setup displays consolidation near support levels with limited overhead resistance, possibly offering acceptable risk-reward situations for position entry.

The mix of good fundamental growth, technical leadership, and acceptable valuation forms a strong case for CAN SLIM investors. The methodology's focus on both quantitative screening and qualitative review of business models places FUTU as a noteworthy candidate for more study.

For investors looking for more CAN SLIM candidates, our pre-configured screener gives continuous screening based on these criteria, allowing for regular tracking of qualifying securities across market conditions.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. Past performance is not indicative of future results.