Fintech Stock and IBD 50 leader are fast approaching the point of purchase
Jack Henry & Associates (JKHY), an IBD 50 leader and fintech stock, is rising for the fifth week in a row as stocks approach a buying point.
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The little-known fintech stock, founded in 1976, offers key information processing solutions for banks and credit unions. Jack Henry & Associates provides the back-end system that handles daily banking transactions and posts updates to accounts and other financial items.
The company offers three core banking platforms: Silver Lake, CIF 20/20 and Episys. Over 400 banks use Silver Lake, with assets ranging from $ 500 million to $ 50 billion. CIF 20/20 is used by 360 banks with $ 3 billion in assets or less; it is the most cost-effective solution for banks with up to 200 users. Finally, Episys is used by the vast majority of credit unions, with assets ranging from $ 3 million to $ 25 billion.
99% storage rate A big plus for this Fintech stock
In essence, Jack Henry’s core banking services are the nuts and bolts of systems that manage deposits, ATMs, loans, and daily transactions. The company boasts close to a 99% storage rate among its customers. Users become very reluctant to change supplier as this will involve learning new technology, retraining employees and high upfront costs.
The company expanded its revenue from $ 1.39 billion in 2017 to $ 1.76 billion in 2021. At the same time, EPS rose from $ 3.14 to $ 4.12. Both annual earnings and earnings per share continued to rise each year, even in the midst of the Covid-19 pandemic.
Analysts expect earnings to continue to increase next year, growing 17% to $ 4.84 for 2022 and a further 9% the following year. Average earnings growth from year to year has reached 26.5% in the last four quarters.
Jack Henry Stock builds cupbase
The stock began building a cupbase in early April. The shares then crossed below the 50-day line and the 21-day exponentially moving average when the share was sold together with the market. The Fintech stock tried to regain these moving averages in June, but was rejected by resistance.
Finally, in early July, the stock broke above these lines and took them back as support. Jack Henry rose more than 2% on Tuesday and is fast approaching a buying point of 205.47 of his current cupbase, according to MarketSmith chart analysis.
The relative strength of the Fintech stock also reached a new high in the weekly chart, a good sign ahead of the potential eruption.
Some possible concerns for this stock include the volume which is weaker than the average in recent weeks. Ideally, we want to see a stock rise in stronger volume towards the outbreak.
Another concern is the fintech stock industry group ranking. The Financial Computer Software Industry Group is not a senior group. It currently ranks 146th among IBD’s 197 groups.
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