WIRE (Long) - Technical perfection and powerful fundamentals
Fundamentals:
Technicals:
Trade:
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- The fundamentals of WIRE are just beautiful to look at: P/E = 5, P/S = 1.1 and P/B = 1.84
- The earnings of the company have doubled since the start of 2021 (average annual growth for the past 5 years has been at 56%); the earnings are expected to come down because of the recession fears but these expectations are already accounted for in the price
- ROE, ROA and ROCE are all comfortably above 30%
- The firm has zero debt, ample liquidity and pays a nice dividend
- Would be hard to find better fundamentals
Technicals:
- If those fundamentals were not enough, the technical setup is an absolute dream
- We can see a robust rounding base which was forming for over a year and culminated in a strong breakout on high volume
- The RSI is strong and rising and the firm is outperforming the market by a large margin
Trade:
- Unfortunately, I missed the breakout. I did not want to chase the stock so I waited for a pullback which just happened and created a great opportunity for an entry
- On a daily, the pattern is even nicer and right now would definitely be a great time to enter from a timing perspective. However, this is a great stock even from a longer-term perspective, so excellent entry is not as important
- Stop-loss could be either the breakout point or the most recent low on the weekly; depends on your risk preferences
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If you like my content, Please leave a like, comment or a donation, it motivates me to keep producing ideas, thank you :)