The choice of Kulicke & Soffa Industries (NASDAQ:KLIC) comes from a methodical screening process built to find stocks that fit two different but matching investment approaches. The screen first uses the strict technical rules of Mark Minervini's Trend Template, a method centered on finding equities in established, strong uptrends. This makes certain any stock is already showing good price momentum and institutional interest. The screen then adds a fundamental filter, needing a minimum High Growth Momentum (HGM) rating. This works to confirm the positive technical view is supported by speeding up business results, a pairing that growth investors frequently look for to take advantage of new market leaders before their complete value is seen. This two-step method works to locate securities where solid price movement and better company results meet.
Technical Fit with the Minervini Trend Template
Mark Minervini's strategy is based on the thought that the largest stock market successes are already in good uptrends before they make their largest gains. His Trend Template gives a fixed list to spot these situations. A look at KLIC's chart and main numbers shows it presently fits the central technical rules.
- Trending Price and Moving Averages: The stock is trading notably higher than its important long-term moving averages (MAs), with its last price of $71.77 placed above the climbing 150-day ($44.13) and 200-day ($41.59) MAs. Also, the nearer-term 50-day MA ($55.34) is higher than both the 150-day and 200-day MAs, confirming the positive arrangement across periods that Minervini stresses.
- Nearness to Highs: KLIC is trading inside 25% of its 52-week high of $77.50, a main part of the template that looks at strength instead of low price. At the same time, the present price is over 30% above its 52-week low of $26.63, showing a major recovery trend is already happening.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 94.98, KLIC is doing better than almost 95% of all stocks. Minervini regularly points out that market leaders show high relative strength, as it indicates the stock is wanted and often pulls its sector higher.
This technical picture indicates KLIC is in a clear Stage 2 climb, the exact period where Minervini's method looks to find chances for involvement in a continuing uptrend.
Fundamental Picture for High-Growth Investors
While the Trend Template confirms a sound chart, the High Growth Momentum filter checks the basic business driver. For growth investors, speeding up earnings and sales are important signs of a company getting more market position or gaining from a strong long-term trend. KLIC's recent fundamental numbers show several good turning points.
- Earnings Momentum: The company has shown a clear recovery in profitability. Earnings Per Share (EPS) for the trailing twelve months (TTM) increased by over 145% year-over-year. More significantly, recent quarterly results show a positive change, with the last quarter's EPS growing almost 19% compared to the same quarter last year, a major gain from the large drops seen in the two earlier quarters.
- Sales Reacceleration: After a time of revenue decrease, the top line is indicating signals of new growth. Sales in the newest quarter grew over 20% year-over-year, and forecasts for the coming quarter predict growth over 44%. This reacceleration is a main number for growth investors, as it often comes before continued earnings growth.
- Operational Gain: The profit margin in the last reported quarter was 3.6%. While small, this shows a key recovery from the almost zero yearly margin reported in the previous fiscal year, pointing to better operational control as sales recover.
These parts—a return to sales growth, a fast recovery in earnings, and margin gain—create the base for a high-growth story, indicating the company could be in the starting periods of a new cyclical or long-term upswing.
Combination: When Technicals and Fundamentals Meet
The investment idea for KLIC, from this screening method, depends on the meeting of its technical and fundamental readings. The good Trend Template score shows institutional money is moving into the stock, pushing it to new highs with force. This price movement is now being confirmed by a fundamental recovery, where earnings and sales growth have turned from negative to positive. For students of methods like Minervini's, this is the perfect situation: a stock showing strong relative strength whose basic business is at the same time confirming the positive price move with better fundamentals. It indicates the rise may be supported by more than just feeling, possibly having a base in real business performance.
Technical Condition Summary
A look at the detailed ChartMill Technical Analysis Report for KLIC gives the stock a high technical rating of 9 out of 10, confirming its very good overall technical condition. The report states both the long-term and short-term trends are positive, and the stock is trading in the higher part of its 52-week range. The main warning given is about the setup quality, which is rated medium (5). This shows that after its recent fast climb, the stock could be stretched in the short term and might gain from a time of consolidation or a drop to a clearer support level before giving a lower-risk entry point for new positions.
Find Like Opportunities
Kulicke & Soffa Industries shows the kind of candidate that appears when screening for both momentum and growth. Investors wanting to locate other stocks that presently fit this joined "High Growth Momentum + Trend Template" rules can run the screen themselves for new results.
Disclaimer: This article is for information and learning only. It is not a suggestion to buy or sell any security. The study is based on given data and certain screening methods, which have built-in limits. Investors should do their own complete research, think about their personal money situation and risk comfort, and talk with a qualified financial advisor before making any investment choices. Past results are not a guide for future outcomes.
