This Long Term Leader is Still in Buy Zone: Mphasis Ltd

Posted Date: April 06 2021

Mphasis Ltd. stock has cleared a 5-week, 12% deep Flat Base last week. The base is formed on another 5-week, 13% deep Flat Base that tried to clear a buy point in February, 2021. This makes it a base on base formation for the stock. Currently, the stock is trading around just -2% away from its ideal buy price of INR 1788. The stock is offering investors an opportunity to get on board at the current price.

What makes Mphasis Ltd.. a stock to watch closely is its consistency in earnings. It has an excellent EPS Rank of 88 and a very strong 5-years earnings stability of 4 which indicates its ability to post consistent earnings growth. The earnings and sales for the stock have grown by 18% and 15%, respectively over the past three years. Over the past five years, the earnings and sales for the stock have grown by 19% and 11%, respectively. The return on equity for the last reported year is 20%.

Another key part of the jigsaw is institutional sponsorship. Mphasis Ltd.. has an Accumulation/Distribution Rating of 'B+'. This represents heavy institutional buying over the past 13 weeks. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

In the last twelve months, Mphasis Ltd. has rallied nearly 159.8% as compared to 60.6% for the Nifty500. It has a Relative Strength Rating of 78. We definitely would like to see improvement in the rating. At this point we are taking a step back and focusing on the RS Line.

The Relative Strength Line of the stock is offering a lot of encouragement to investors. It has been making good progress in the last four weeks. The overall long term trend of the line is also trending upward. If Mphasis Ltd. can maintain this outperformance, it could make sense as a CANSLIM trade.

The key trend lines, 10 and 40-week moving averages are at a comfortable position. The current trends of both the averages are upward and the 10-week moving average is trending above the 40-week moving average. The current price of the stock is trading around 5.7% away from the 10-week moving average.

The stock belongs to the industry group of Computer-Tech Services. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 87. The current price of Mphasis Ltd. is -3% off from its 52-week high price and 168% above its 52-week low price.

The stock appears on our idea lists: Trend Template - 5 MonthsLong Term Leaders.

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