UMS just reported its results last Friday with an earnings of $15.1 million for 3QFY2021, up 17% y-o-y. For the nine months, earnings shot up by 43% y-o-y to $50.4 million to a record while revenue was up 53% y-o-y to $184 million.
The record numbers came from the strong growth in the global semiconductor industry.
After looking at the results, we decided to alert our EXCLUSIVE CLIENTS on this trade as we saw that UMS might have the potential to break that $1.42 horizontal resistance. Why didn’t we alert them earlier? The reason to this is simple, we don’t like TRADING over results as results could swing any way and also depends on how analyst see it, their forward statement which is too much to anticipate. But for investors it would be a different story. We hold until the fundamentals changes.
We have seen far too many stocks gapping down after results not matching up and traders getting stuck. We like to err on the side caution and wait for results to see if momentum continues. Don’t forget, UMS ran up before results and if results didn’t meet expectations…then bye bye. If you trade the US markets, you know how brutal it can be if results misses expectation, a drop of 20-30% is possible.
As UMS was consolidating for awhile, and a break above that $1.42 might spark a new wave up, so that was one rationale on alerting our clients. Also, it reported a good set of results. We’re glad it has hit our first upside target of $1.48 and now we got a nice margin of safety.
Chart Source: AdvisorXs 16th Nov 2021
From the chart above, we might see UMS move higher even to that upper channel of around $1.70. Of course, it won’t move in a straight line. =).
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