Today’s IBD Screen Of The Day focuses on growth stocks that funds are buying. It’s one of several powerful screens found in the IBD Stock Screener. This is a list of companies seeing their overall fund ownership increase. Institutional interest in a company is typically a bullish indicator.
Mitek Systems (MITK), GrowGeneration (GRWG) and Himax Technologies (HIMX), all fairly new to the IBD universe of commonly talked about stocks, are featured on this list and maintain strong recent fundamental and technical performance.
Analyzing Himax Technologies Stock
Himax Technologies stock saw a jump in its fund ownership for the most recent, March-ended, quarter. The Taiwanese firm shows fund ownership rose to 55 from 40 in the previous quarter. Fund ownership has also risen for the past four consecutive quarters.
The growth stock built a new consolidation, according to MarketSmith analysis, with an ideal buy point of 17.98. Shares traded just 7% below this key area on Wednesday.
The stock has been holding above its 50-day moving average over the past few weeks as it approaches the top of the consolidation.
Himax’s relative strength line has been moving higher since the middle of May, alongside the stock price. This compares a stock’s performance with that of the S&P 500. The stock also holds an impressive 98 Relative Strength Rating.
The growth stock currently shows a best-possible IBD Composite Rating of 99. Himax’s year-over-year EPS has grown by an average 696% over the past three quarters. This well exceeds IBD’s CAN SLIM requirements for top growth stocks.
GrowGeneration, the next featured stock on this list, has had a difficult 2021 so far as well, with its stock drifting largely sideways. But shares have still risen 20% year to date, despite a lot of choppy trading. The growth stock has clearly been consolidating after a meteoric rise in 2020. Shares recently regained support above the 50-day after dipping briefly below the line.
GrowGeneration engages in the distribution of organic nutrients, soils and hydroponic equipment to commercial and home growers. The company shows 259 funds owned it in the March-ended quarter, up from 200 in the quarter prior. Most impressively, this metric made a big leap from the same period a year ago, where fund ownership totaled only 13 for the quarter ended March 2020.
The relative strength line is trading off its recent highs. But GrowGeneration stock still maintains a Relative Strength Rating of 98, which is well above the ideal minimum of 80 on a scale from 1 to 99.
Mitek Systems Stock
Mitek Systems is approaching the buy point of a cup-with-handle base with a proper entry of 19.94. Shares remain just 2% away from the entry. The growth stock recently regained support at the 50-day line and has been trading above this area of support since the beginning of May. The stock pulled back over the past few months to form the current base.
The RS line has been choppy but trending higher since early May. The stock only shows a year-to-date rise of 8% so far in 2021, due to the base formation.
The company offers mobile applications and software development tool kits. In the three most recent quarters, year-over-year earnings growth rose an average 21%. Additionally, Mitek boasts five quarters of increasing fund ownership.
The growth stock shows fund ownership of 271 in the most recent quarter.
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