Finding Leading Stocks

Stocks gapping up to, or near, new highs this morning:

MU, WDC, STX, INTC, TTMI, TER, ALAB, AMD, VSH, LSCC, STM, TSM, and ADI.

VSH: Price Is King

VSH is one of those names that has been showing up on my relative strength screener.

I have not participated in it.

I have mostly just watched it go higher.

But when you look at the last three quarters, it is easy to understand why the stock has been moving.

1. Earnings have accelerated.

2. Sales have accelerated.

3. It is in a hot industry group.

And the estimates over the next few quarters are large.

That said, it is not perfect.

Pre-tax margins and ROE are not great, and fund ownership has been relatively flat quarter over quarter.

But price is king.

And VSH has been a huge winner for the traders who participated in it.

This is another reminder that the relative strength screener is not there to tell me what I already believe.

It is there to show me what the market is actually rewarding. Simple but powerful tool.