The canny CAN SLIM investor should always be looking for firms with accelerating sales growth. This key bullish trait is shared by top stocks Apple (AAPL), PerkinElmer (PKI), SVB Financial (SIVB) and Square (SQ).
Accelerating growth means that sales showed a larger percentage gain in the latest quarter than in the prior quarter. CAN SLIM pioneer William J. O’Neil recommends strong and improving quarterly earnings, backed by sales growth of 25% in the latest quarter, or at least accelerating growth. At least three consecutive quarters of accelerating sales growth is a bullish fundamental metric shared by many of the stock market’s big winners.
Apple Stock
Accelerating sales growth is one of the keys to Apple becoming the first ever trillion dollar stock. In the past six quarters sales have revved up from a meager 3% growth to a whopping 17%.
Apple stock rose 2.9% to 207.39 on the stock market today. Apple stock has pushed on since breaking the $1 trillion market-cap threshold, and its relative strength line is showing a pronounced upward trend. It has blasted above the buy zone from a six-week flat base with a correct entry of 194.30.
This is despite worries about sluggish iPhone sales. Due to this, the firm is relying on a continued boom in high-margin services revenue. Another issue for Apple stock is that, despite CEO Tim Cook gradually increasing the amount of revenue spent on R&D from 2.2% to 5.1% of revenue, the company has yet to introduce a “home run” product under his leadership.
PerkinElmer Stock
PerkinElmer stock has powered into buy zone after posting accelerating sales growth for the past four quarters.
The stock soared into buy zone Thursday after a 27-week consolidation, MarketSmith analysis shows. PerkinElmer stock rose 8.3% to 86.55. The correct entry point is 84.59. It made its big move after the company beat on earnings and revenue Thursday. EPS exploded 36% to 91 cents, while revenue jumped 29% to $703 million.
PerkinElmer stock has an impressive IBD Composite Rating of 94. This puts it in the top 6% of stocks tracked. The firm manufactures chromatographs, spectrometers, surgical lamps, optical and temperature sensors, and imaging readers.
SVB Financial Stock
The Silicon Valley Bank holding company has seen its sales accelerate for the past six quarters in succession. This has given SVB Financial’s stock a strong tailwind as it has fought its way to big gains.
The IBD 50 member is working on a possible entry of 333.84, rising 2.3% to 320.81 on Thursday. It has made gains in the past three sessions and has retaken its 50-day line, a key technical support level. The firm beat on earnings and revenue last week.
SVB Financial stock boasts an IBD Composite Rating of 98. This puts it in the top 2% of stocks. It also ranks first in the Banks-Super Regional Industry Group.
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. It also offers private banking services for high-net-worth individuals.
Square Stock
Payment processor Square has posted accelerating top-line growth for the past six quarters. In the most recent quarter reported late Wednesday, revenue jumped 48%. Earnings also beat, though guidance was mixed.
Investors interested in buying Square stock may do best waiting for a new base to form. It is currently in profit-taking zone after breaking out from a 10-week cup base with a buy point of 58.56. Square stock vaulted 8.7% to 72.65. In addition, its fundamentals are not ideal, though its IBD Composite Rating is still good at 92.
The San Francisco-based firm makes credit-card readers that plug into mobile phones and tablets. In November, it set up a Bitcoin exchange so that users of its Square Cash app could buy and sell the digital cryptocurrency.
