Finding Leading Stocks

SMTC: New Highs. Big Volume. Accelerating Growth.

SMTC showed up in our RVOL Now scan in MTS Velocity on Wednesday morning, September 16. Three consecutive sessions of heavy volume followed through Friday’s close as the stock broke out to new 52-week highs.

The setup had been developing: a strong earnings release on August 25, followed by price tightening up the right side of the base before this week’s breakout.

And the numbers behind the chart?

• Earnings growth accelerated: +10% → +34% → +73% over the last three reported quarters.

• Sales growth accelerated: +9% → +16% → +33% over the same period.

• Fund ownership expanded: 460 funds → 610, a 32.6% increase from the previous quarter.

• Return on equity: 23.7%.

• One-year Relative Strength rating: 96.

Earnings and sales figures above are year-over-year growth.

This is the combination I look for: accelerating earnings and sales, increasing institutional sponsorship, strong relative strength, and strong price and volume action backing the breakout to NEW Highs.

Rates Up. Growth Holds Up.

The initial reaction caught my attention.

The Nasdaq 100 and Russell 1000 Growth led the indexes I track. Technology was the top sector, with strength in memory and semiconductor names.

That same theme showed up when I opened the MTS Velocity RS Screener and looked for today’s strong performers meeting my growth-based earnings and sales criteria.

One standout: SMTC, Semtech, up 11.03%.

The numbers behind the move:

• Quarterly earnings growth: +73.17% year over year.

• Quarterly sales growth: +32.73% year over year.

• Return on equity: 23.66%.

• Quarterly pretax margin: 16%.

• One-year relative strength rating: 96.

And institutional sponsorship is expanding. The latest reported fund count increased 32.6%.

That’s a semiconductor stock showing strong growth, profitability, high relative strength, and increasing fund participation, gaining 11% with BIG volume on a rate-hike day.

One session doesn’t settle the market’s direction. But seeing the same strength emerge across indexes, sectors, and individual stocks is information worth paying attention to.

Hey MTS Velocity, Find Me a Fundamentally Strong Stock Moving Pre-Market 👀

Show me stocks with:

• A minimum price of $10

• A minimum market cap of $1 billion

• A minimum 30-day average volume of 1 million shares

• Quarterly EPS growth of at least 20% year over year

• Quarterly sales growth of at least 20% year over year

• ROE and/or pretax margins of at least 15%

• Price above the 50-day and 200-day moving averages

• The 50-day moving average above the 200-day

• 1yr RS 80+

• Up 4%+ pre-market

Here’s what came back: SMTC

EPS growth: +73%

Sales growth: +32%

ROE: 23%

One-year Relative Strength: 94

Fund ownership growth last quarter: +31%

Forward estimates point to continued acceleration in both earnings and sales, and the latest earnings report is now out of the way.