IBD 50 member SVB Financial (SIVB), along with FleetCor (FLT), Qualys (QLYS), Commvault Systems (CVLT) and Columbia Sportswear (COLM) are all top stocks with accelerating earnings or sales growth, and currently charging toward a buy zone.
Accelerating growth in earnings or sales is a key bullish indicator. Ultimately, earnings drive a stock’s price, while strong sales usually translates into robust profits. CAN SLIM connoisseurs all know the C in the acronym stands for current quarterly earnings growth of at least 25% for the past two quarters. But accelerating quarterly earnings growth and quarterly sales growth are also highly desirable.
SVB Financial Earnings
SVB Financial’s earnings and revenue growth have been accelerating for the past six quarters. These impressive results have helped push SVB Financial stock sharply higher in 2018, though it has moved sideways for nearly four months. Shares are working on a buy point of 333.84 after forming a 7-week flat base, MarketSmith analysis shows. SVB Financial stock rose 1.4% to 319.29 in Friday’s stock market trading, rebounding from a 50-day line test.
The stock’s relative strength line, which compares a stock’s price performance to that of the S&P 500, has been moving sideways since late May. Before that the RS line had a strong uptrend.
SVB’s Silicon Valley Bank focuses on lending to technology companies. It has helped fund more than 30,000 startups, including Airbnb, Pinterest, Fitbit (FIT) and TrueCar (TRU). While it is known as the “bank to the tech stars,” SVB Financial also serves venture capital and private equity firms investing in the tech and biotech fields.
FleetCor Earnings Growth
Meanwhile former member IBD 50 member FleetCor could also be gearing up for a move after building a 7-week flat base with a buy point of 226.02. FleetCor stock closed the week at 221.08. Shares have retaken and moved above its 50-day line in the past week.
FleetCor earnings growth has accelerated for the past three quarters. However, revenue growth has decelerated for the last four quarters.
The stock’s relative strength line hasn’t made much headway since early February.
FleetCor is a specialty payments firms, providing prepaid fuel cards for fleets. It’s been expanding into other commercial payments services. The stock has very good fundamentals, holding an IBD Composite Rating of 95.
Qualys Sales Growth
The cloud security giant has enjoyed accelerating revenue growth for the past four quarters. And while earnings have been stop-start, they have been growing by double digits for the past five quarters.
Qualys stock is currently chasing a 98.40 buy point in an 8-week cup base. Shares dipped 0.3% to 94.60 on Friday.
The RS line has been picking up since the midpoint of the base.
Canny investors hunting for top stocks are always looking for leaders, which of course puts the L in CAN SLIM. Qualys does well here, as it holds the number one spot in the highly rated Computer Software-Security Group. It boasts a best-possible Composite Rating of 99.
Commvault Systems Stock
The data protection and information management software company has posted accelerating earnings growth for the past two quarters, but has a spotty history before that. Sales growth has been in the single digits for the past seven quarters.
On the plus side, analysts expect earnings growth to accelerate again, to 76% in the current fiscal Q2. For all of fiscal 2019, analysts see a 64% EPS pop. That could boost Commvault’s mediocre 67 EPS Rating and its so-so Composite Rating of 83.
Commvault stock fell 0.3% to 69.60 Friday. It’s working on a 72.75 buy point from a 14-week flat base.
However, Commvault’s RS line has been lagging since the end of April and hasn’t made headway for nearly two years.
Columbia Sportswear Sales Growth
The outdoor and skiwear specialist has posted accelerating revenue for the past three quarters. Earnings have been accelerating in the past four quarters, though technically the last quarter does not count as it was a rebound from a loss. But it’s the first time in several years that the apparel maker has made money in that summer quarter.
Columbia Sportswear stock edged down 0.4% to 91.72, close to the 95.68 entry from a flat base.
Columbia Sportswear stock has rallied strongly in 2018, but tumbled after its last earnings report, marking the low of the current consolidation. Since then shares have been slowly recovering. But that recovery has largely come on below-average volume, suggesting little buying by mutual funds and other big institutions. Also, the RS line has not risen that much in the past several weeks, and is still a ways off highs. Before that, the RS line steadily climbed for a year.
Still, Columbia Sportswear stock has excellent fundamentals. Its Composite Rating of 98 puts it in the top 2% of stocks tracked. In addition the Accumulation/Distribution Rating, a measure of institutional investment, is a strong B+.
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