X Financial-ADR (NYSE:XYF) Stands Out as a CAN SLIM Investment Candidate

The CAN SLIM investment strategy, created by William O'Neil, uses fundamental and technical analysis to find high-growth companies with solid momentum. This methodical process assesses stocks using seven main factors represented by the letters CAN SLIM, concentrating on companies with quickening earnings, high yearly growth, new products or services, and backing from institutions, while also accounting for the general market direction. The system aims to find market leaders displaying fundamental soundness and momentum.

X Financial-ADR (NYSE:XYF) appears as a noteworthy option when assessed with the CAN SLIM method. The Chinese online personal finance company runs a technology platform for personal finance services, mainly providing Xiaoying Card Loan and Xiaoying Preferred Loan products and also wealth management services via its Xiaoying Wealth Management platform.

Fundamental Strengths

X Financial displays a number of traits that fit CAN SLIM's fundamental rules. The company presents notable quarterly growth numbers that meet the system's "C" factor for present earnings increase:

• Quarterly EPS growth of 44.93% year-over-year
• Quarterly revenue growth of 65.60% year-over-year
• Three-year EPS growth rate of 28.92%

These growth numbers are much higher than CAN SLIM's lowest limits of 20-25% for quarterly earnings growth and 25% for yearly earnings gains. The company's Return on Equity of 22.63% is above the 10% minimum needed, showing good use of shareholder money. Also, the debt-to-equity ratio of 0.41 is lower than the system's highest limit of 2.0, showing careful financial management.

Technical Positioning

From a technical view, X Financial shows a varied but notable situation. The stock's relative strength rating of 91.11 shows it has done better than 91% of all stocks in the market during the last year, meeting the CAN SLIM need for leadership traits. This solid relative performance matches the "L" factor for finding market leaders instead of poorer performers.

The technical review shows the stock is now trading close to the bottom of its recent price range, with noted support near $11.82. Although both short-term and long-term trends are negative, the setup quality score of 5/10 implies the stock might be building a base pattern, which could offer a chance for investors looking for correct chart patterns as highlighted in the CAN SLIM system.

Institutional Considerations

X Financial's institutional ownership is only 4.35%, which shows both possibility and issue from a CAN SLIM viewpoint. While the low percentage means limited institutional backing at this time, it also implies major room for more institutional purchases if the company keeps showing strong fundamental results. CAN SLIM investors usually search for stocks with increasing institutional attention but where ownership is not too high.

Market Context

The wider market situation shows a positive short-term trend for the S&P 500 with a neutral long-term view. CAN SLIM notes the value of market direction, indicating investors should be especially careful during neutral market periods while staying informed of general market condition.

Complete Analysis

The fundamental analysis shows a company with very good profitability measures, acceptable financial health, and good valuation levels. The technical analysis indicates the stock has displayed solid relative performance even with recent price movement, with the chance for a base to form.

Looking at Other Options

For investors wanting to find other companies that fit CAN SLIM factors, more screening results are available using our pre-configured CANSLIM stock screener. This tool permits more changes based on personal investment choices and risk level.

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 consult with financial advisors before making investment decisions. Past performance does not guarantee future results.