For investors looking for a systematic path to growth, joining fundamental momentum with technical study can be an effective plan. The aim is to find companies that are not just seeing faster earnings and sales but also showing firm price trends and helpful chart formations. This process sorts for stocks with a high growth momentum score, pointing to solid and frequently speeding business results, while also needing a high technical score to verify market strength and a high setup score to find possible entry spots during pauses. This two-part method tries to find high-quality growth stocks as they come out of quiet periods, set for their next rise.
ANALOG DEVICES INC (NASDAQ:ADI) offers a strong example for this plan, now fitting the standards with a High Growth Momentum Score of 6, a best-in-class Technical Score of 10, and a Setup Score of 7.
Fundamental Growth Momentum
Analog Devices' fundamental score shows a company in a firm growth stage, bouncing back well from a cyclical low. The numbers show a business with important positive motion in main areas:
- Earnings Speed Increase: The latest quarter had a year-over-year EPS growth of 35.3%, a notable speed increase from the 29.7% growth in the previous quarter. Experts think this pattern will keep going, predicting 42.7% growth for the next quarter.
- Steady Performance: The company has exceeded both earnings and revenue forecasts in each of the past four quarters, with average beats of 4.2% and 2.5%, in that order. This steady beating of forecasts builds trust with the market.
- Firm Cash Creation: Free cash flow per share has increased 37% over the past year, highlighting the quality of earnings and the company's financial health.
- Growing Profitability: The profit margin in the last reported quarter was 25.6%, a large growth from 18.0% in the quarter before and 16.1% two quarters earlier. This points to better operational efficiency along with top-line growth.
- Positive Forecast Changes: Experts have been increasing their forecasts, with the average EPS prediction for the next fiscal year moved up by 6.8% over the last three months. This is a key part of the momentum score, as growing expectations often come before more price gains.
These points together support the stock's High Growth Momentum Score. For momentum investors, this mix of speeding growth, positive surprises, and upward forecast changes is exactly what shows a company may be starting a time of continued outperformance.
Technical Health and Market Position
While fundamentals push the long-term story, technicals verify the market's acceptance of that story. According to the detailed technical report, Analog Devices shows outstanding technical condition, receiving a top score of 10. This score comes from a full study of trend, strength, and relative performance.
- Strong Trend Agreement: Both the long-term and short-term trends are scored as positive, making a united bullish view across time frames.
- Market Beating Performance: The stock's yearly performance puts it in the top 8% of all stocks, and it is now trading at a new 52-week high. This shows clear strength.
- Firm Support Framework: The technical study finds several levels of support below the present price, including a meeting of moving averages and trendlines near the $314 level. This gives a clear plan for risk control.
A high technical score answers the question of which stock to study, it finds market leaders in firm uptrends. ADI’s top score confirms it is solidly in that group.
Finding a Helpful Setup
A firm trend by itself is not a buy signal, entering during a steep climb holds high risk. This is where the Setup Score of 7 becomes useful. It shows the stock is pausing its recent gains in a fairly narrow band, forming a base for its next possible move.
The technical report states that ADI has been trading between about $292 and $328 over the past month and is now near the top of that band. This pause has let the stock ease any overbought conditions while staying near its highs, a sign of health. The report also points out a recent "Pocket Pivot" signal, a volume-based sign that suggests buying by large investors during the pause phase. This setup allows for a specific plan: a move above the recent band high could be viewed as a possible entry signal, with a stop-loss set below the nearby support area.
Conclusion
Analog Devices Inc. shows the kind of chance looked for by mixing growth momentum with technical setup filters. Fundamentally, the company is displaying speeding earnings, growing margins, and getting positive expert forecast changes. Technically, it is a verified market leader in a firm uptrend that is now waiting in a pause pattern. This combination suggests ADI may be getting ready for its next rise, offering a possible entry point for momentum-focused investors who value both business performance and chart discipline.
Want to find more stocks that match this High Growth Momentum Breakout profile? You can use the screen yourself with the High Growth Momentum Breakout Setups Screen on ChartMill.
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Disclaimer: This article is for information only and is not investment advice, a suggestion, or an offer to buy or sell any security. The study is based on given data and should not be the only base for an investment choice. Always do your own study and think about talking with a qualified financial advisor before making any investment. Past results do not show future outcomes.
