One of the interesting aspects of investing in stocks is learning about different businesses.

With our trading strategies, we often encounter businesses that are much better than we ever imagined. We are familiar with many of them but had no idea how great a company they are and also didn't realize how well the stocks have performed.

We are just now emerging from a nasty six-week correction that has dragged down even the best stocks in the market.

Today’s HX Trader idea is one of these stocks.

A company with a reasonably well-known product but whose historical operational performance will surprise you!

It has also been one of the BEST stocks of the last decade.

Here is the idea…

The company is financial analytics software company, Fair Isaac Corporation (NYSE: FICO).

While you may not be familiar with that company name, you are likely familiar with their product – the FICO credit score.

They are the leader in the industry, where they calculate consumer credit scores to help financial institutions and other businesses judge a borrower's creditworthiness.

The company was founded by engineer Bill Fair and mathematician Earl Isaac in 1956, and they were pioneers in the credit score business. The big jump in their business occurred when government mortgage institutions Fannie Mae and Freddie Mac began using the FICO scores to determine which American consumers qualified for a mortgage.

We were familiar with the FICO score but weren't aware of how excellent a company – and stock – FICO has been through the years.

We devised this idea using our proprietary software system, Signal Trader Pro. As an HX Society member, you have free access to this software. If you haven't signed up yet, we encourage you to sign up today.

It is a system that we have developed with our partner over the last three decades and used successfully at several of our hedge funds, managing hundreds of millions of dollars.

Now, we are bringing the power of algorithmic trading – the same strategy that powers hedge fund powerhouses like Citadel – to our subscribers.

FICO ranks "12" on our proprietary "15-point scoring system. It recently triggered one of our RSI "buy" signals and led us to dig into the company.

We had never considered it before, but the credit score business has grown substantially. Consumer credit usage has grown steadily, and institutions want more information.

This has resulted in strong growth in FICO's earnings. Here is a table showing the increase in earnings per share or "EPS" over the last decade…

The company has grown EPS almost tenfold over the period.

More impressively, look at the growth rate over the last six years – they have grown at a compounded 25%+ rate. This is an impressive – and consistent – growth rate and why the stock has been so strong.

They also have managed to post consistent positive earnings revisions. This is when analysts need to increase their estimates over time.

Here is the chart showing the analysts’ estimates for 2025 EPS (in green) along with the stock price (in black) …

Over the last two years, the estimate has increased by more than +50%. This has also helped drive the stock price higher over the same period.

We mentioned previously that FICO has been a great stock. Here is the chart of the stock price performance over the last decade…

At a recent high of over $2400 per share, the stock was up forty-fold over the ten-year period. AMAZING!

Look closely at the chart, though, and you can see the stock sold off recently.

Here is a shorter-term chart that includes both the stock price as well as our key tactical trading indicator – the relative strength index or “RSI” …

The chart shows that earlier this new year the stock triggered our RSI "buy" signal.

This is when the stock trades below an RSI level of 30 and then back above that level. This is a sign that investors were scared but have begun to stop panicking.

Why is FICO stock down so much in the last few months?

Like our recommendations for home builders in the last few weeks, it is another stock that has sold off with the increase in interest and mortgage rates.

The logic would be that higher mortgage rates would lead to less mortgage activity and less need for FICO’s services.

Our view is the same as it is with the homebuilders. Rates have not moved up that much, are not at absolute levels that really matter, and are back where they were just a few months ago.

We think the earnings at FICO will be just fine, and the stock will recover.

Historically, buying the stock after it triggers our RSI "buy" signal has also been a great strategy. Here is how the stock has performed over the last ten years after it has triggered the signal…

Over the following 90 days, the stock is up 90% of the time with an impressive double-digit return.

This makes sense, considering the strength of the business historically.

We think we are seeing another of these opportunities, and the "credit score" of FICO's stock says buy!