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Vitalii Liubimov's Avatar
published in Blogs
Dec 18, 2020

Bullish Signal on Hong Kong Fintech Firm has High Probability of Success

With current market conditions and with lockdowns around the globe, more and more people are working from home. It also appears more and more people are trading from home. The number of short-term traders and the hype around certain stocks is starting to remind me of 1999 and 2000. I hope the outcome is different this time around, but the demand for financial technology that helps people trade online is growing.

One firm in Hong Kong has seen tremendous earnings and revenue growth as a result of the trend. Futu Holdings (FUTU) and its subsidiaries provide investing services for Hong Kong, US and China Connect stocks, to individual investors through its proprietary one-stop digital platform, Futubull.

The company has seen earnings grow by 111% per year over the last three years while revenue has grown by 96% per year. Earnings jumped 1,800% in the third quarter as revenue jumped 276%. The stock itself is up over 300% so far in 2020, and that’s after a 20% pullback in the last month. The recent pullback brought the stock down to a support level in the $40.50 area—the high from earlier this year.

The stock fell to the support in early December and then bounced a little before dropping back down to retest the support. Now it looks as if the stock is turning higher again and Tickeron’s Trend Prediction Engine received a bullish signal on the stock on December 17. The signal shows that the odds of success are 90% for a bullish move over the next month.

The strong revenue growth has given Futu a high SMR Rating on Tickeron’s fundamental ratings and the huge jump in earnings has created a great P/E Growth Rating. The SMR Rating is a 16 and P/E Growth Rating is a 7. That means the company is in the top 16th percentile and the 7th percentile in these two categories.

On the technical side, the daily stochastic indicators were in oversold territory for a few days before making a bullish crossover and moving out of oversold territory on December 17. The stock also got a bullish signal from the Momentum Indicator on December 18.

The full outlook from Tickeron shows there are some concerns on both the fundamental and technical sides.

 

Related Ticker: FUTU

FUTU in -10.95% downward trend, declining for three consecutive days on November 13, 2024

Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where FUTU declined for three days, in of 298 cases, the price declined further within the following month. The odds of a continued downward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on November 12, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on FUTU as a result. In of 79 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for FUTU turned negative on November 08, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 41 similar instances when the indicator turned negative. In of the 41 cases the stock turned lower in the days that followed. This puts the odds of success at .

FUTU broke above its upper Bollinger Band on November 07, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Bullish Trend Analysis

The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where FUTU advanced for three days, in of 326 cases, the price rose further within the following month. The odds of a continued upward trend are .

The Aroon Indicator entered an Uptrend today. In of 218 cases where FUTU Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. FUTU’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 69, placing this stock slightly better than average.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.522) is normal, around the industry mean (5.701). P/E Ratio (14.521) is within average values for comparable stocks, (33.698). FUTU's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (2.610). FUTU has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.030). P/S Ratio (6.207) is also within normal values, averaging (112.655).

Notable companies

The most notable companies in this group are Morgan Stanley (NYSE:MS), Goldman Sachs Group (NYSE:GS), Charles Schwab Corp (The) (NYSE:SCHW), CME Group (NASDAQ:CME).

Industry description

These banks specialize in underwriting (helping companies with debt financing or equity issuances), IPOs, facilitating mergers and other corporate reorganizations and acting as a broker or financial advisor for institutions. They might also trade securities on their own accounts. Investment banks potentially thrive on expanding its network of clients, since that could help them increase profits. Goldman Sachs, Morgan Stanley and CME Group Inc are some of the largest investment banking companies.

Market Cap

The average market capitalization across the Investment Banks/Brokers Industry is 11.53B. The market cap for tickers in the group ranges from 13 to 928.5B. PKRSF holds the highest valuation in this group at 928.5B. The lowest valued company is BFCH at 13.

High and low price notable news

The average weekly price growth across all stocks in the Investment Banks/Brokers Industry was 3%. For the same Industry, the average monthly price growth was 16%, and the average quarterly price growth was 23%. MFH experienced the highest price growth at 315%, while DYNA experienced the biggest fall at -78%.

Volume

The average weekly volume growth across all stocks in the Investment Banks/Brokers Industry was -2%. For the same stocks of the Industry, the average monthly volume growth was 73% and the average quarterly volume growth was 121%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 60
P/E Growth Rating: 65
Price Growth Rating: 48
SMR Rating: 64
Profit Risk Rating: 68
Seasonality Score: 22 (-100 ... +100)
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FUTU
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General Information

a technology company, which engages in online brokerage services and margin financing services for clients in Hong Kong and China

Industry InvestmentBanksBrokers

Profile
Fundamentals
Details
Industry
N/A
Address
No. 18 Bonham Strand West
Phone
+852 25233588
Employees
2784
Web
https://www.futuholdings.com
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