Throwing dice at a stock is a guarantee to come up snake eyes.
I don’t throw dice, darts or anything else at anything in the stock market. I only buy a stock for an absolutely proven reason.
And today, I’m going to show you one of my primary reasons for buying a stock – the right stock – a stock set to surge in price. One that I recommended with this reason netted 657.00% in a surging gain!
And I’m going to give you a stock to buy today that has made it through my gauntlet of analysis called my SSI System that will surge in profits for you right now!
To get the rundown on my gauntlet that grabs the right stocks – you need to read my special report for subscribers only to my Traders Daily Direction: The Magic of the SSI that you can download right now, here.
Primary Reason for Surging Stocks
Companies reporting bigger sales and bigger earnings tend to outperform the market.
They are the best of the best.
Consumers like their product or service and they are buying more of it.
This leads to Wall Street’s favorite thing – growth.
If you stick to stocks showing improving sales and earnings, odds are you will do very well.
But to drastically outperform the market, you want to focus on companies taking things a step further.
The secret ingredient?
Growth is good.
Accelerating growth is better.
I’ll show you what I mean…
Between 2009 and 2010, F5 Networks (FFIV) skyrocketed.
The stock surged 657% in less than two years.
Investors loved F5 stock.
The company wasn’t just growing its sales and earnings.
That growth was accelerating.
Earnings per share jumped by 22% versus a year prior.
Then 30%… 47%… 65%…
This acceleration was the primary driver behind the meteoric rise in FFIV.
The Stock to Buy Now
So, let’s look at another stock.
This one is demonstrating even greater acceleration of its fundamentals.
And it is doing so right now.
The company is Kulicke and Soffa Industries (KLIC).
It designs and sells the tools used to make semiconductors.
Semiconductors or “chips” are one of the hottest component items that are in very short supply and hyper-active demand right now.
Specifically, chips became hot starting last year with the stay-at-home and remote work as everyone of us needed more electronics for everything from phones to laptops and even workout equipment.
Manufacturers and assemblers that depend on chips slashed orders leading into the virus mess under the misunderstanding of product demand. And the primary chip makers, Samsung Electronics (005930, Korea) and Taiwan Semiconductor (TSM) slashed production and dropped inventories.
Chips take a while to make. Sure, each takes seconds on an assembly line – but the lines as well as the input goods are the heavies of heavies of capital-intensive equipment. And you can’t just snap a finger to make and turn them on.
So, even the best and the biggest including Samsung and Taiwan Semiconductor can’t just turn a switch and ramp up production.
Shipping is another bottle neck. Ships are short in supply and strong in demand. So, even chips that are made are getting backlogged in shipping.
And there have been some other odd-ball disruptions including the power-outages in Texas that curtailed chip making and deliveries.
But now with the biggies including Samsung and Taiwan Semiconductor as well as other chip makers all firing up and expanding production, Kulicke and Soffa Industries (K&S) has had flush order books for its equipment for making chips work and that order book is only getting bigger and fatter.
This is showing up in the revenue surge underway for K&S over the past quarters.
K&S Quarterly Revenue Growth Source Bloomberg
And this in turn is fueling the surge in K&S’s earnings.
K&S Earnings Before Interest, Taxes & Amortization (EBITA) Source Bloomberg
This growth in sales and earnings is now driving the stock price to accelerate as seen below:
It’s hard to ask for better fundamentals.
This stock is a textbook example of sales and earnings growth acceleration.
Shares are up 143.5% year-to-date but this is likely just the beginning.
The trend is unquestionably pointing higher.
We have triple momentum with the 50, 100 and 200-day moving averages properly stacked.
And my custom money flow indicator (MFI) is back above 50.
You can learn more about Triple Momentum and MFI in my primmer on my SSI System in my special report that you can read for free right now: The Magic of the SSI that you can download right now, here.
K&S Buying Opportunity
And shares are consolidating to form a tight range near the $56 mark.
If KLIC breaks out above $57.50, I’ll be buying the stock.
As usual, I want to see a surge in volume accompanying the move up in price. That for me would be at least a big jump over the average daily volume that is currently running at 649 million shares.
Another Deal to Buy Now
I want to let you know about my brand-new product called Stealth Trades.
As you’ve been reading my work – and I hope taking my lead on getting in on many profitable surge stocks in my Traders Daily Direction – Stealth Trades takes my efforts to the next level.
In my Stealth Trades, I provide ongoing action lists of stocks to buy, trade and plenty of option ideas complete with more detail than I could ever do in just my daily email.
The folks at Traders Agency have come up with a deal for founding members of my Stealth Trades that is only available to readers of my Traders Daily Direction. It’s a special rate and only available for so many days. To learn more, and hopefully to subscribe – you should – or rather need to click here.
And to get more on surging stocks on the Traders Daily Direction watchlist as well as other stocks that I’m following, click here.