For investors looking to join solid fundamental growth with positive technical patterns, a layered screening method can be useful. One such technique uses filters for stocks that show strong earnings momentum, good basic business growth, and a price chart indicating a possible breakout. This is done by finding securities with a high ChartMill High Growth Momentum (HGM) Rating, which measures short-term earnings speed and positive changes, together with high Technical (TA) and Setup Ratings, which point to a good uptrend and a tightening price pattern ready for a new move upward. This combination seeks to find companies where solid fundamentals might be close to starting the next price increase.
A recent filter using this method, searching for a High Growth Momentum Rating over 4, a Technical Rating over 7, and a Setup Rating over 7, found AMER SPORTS INC (NYSE:AS) as a candidate for more review. The Finnish sporting goods company, which owns brands like Arc'teryx, Salomon, and Wilson, seems to be gaining speed on both fundamental and technical sides.
Fundamental Growth Momentum
The center of the High Growth Momentum plan is finding companies with speeding business results, and Amer Sports makes a strong case from the given numbers. Its HGM Rating of 6 shows force across several important growth areas key for this investment style.
- Strong Earnings Growth: The company has shown notable year-over-year earnings per share (EPS) growth. The TTM EPS growth is at a high 336.8%, while the newest quarter saw EPS rise 135.7% against the same time last year. This type of forceful earnings increase is a main mover for momentum investors.
- Steady Sales Growth: Revenue growth gives the base for lasting earnings. Amer Sports displays solid and even revenue gains, with TTM sales growth of 25.9% and the last quarter growing at 29.7%. Significantly, sales growth has been steadily over 24% for each of the last four reported quarters, showing stable demand.
- Positive Surprises and Changes: The company has passed EPS estimates in three of the last four quarters, with an average surprise of 54.1%. Also, analysts have changed their earnings estimates for the next year higher by 8.6% over the last three months. These parts, surprises and higher changes, are key pieces of the HGM Rating, as they often come before continued positive price momentum while the market adapts to better outlooks.
Technical Force and Setup Condition
While good fundamentals give the "why," the technical view gives the "when" for a possible entry. According to the detailed ChartMill Technical Report, Amer Sports does well here too, getting a high Technical Rating of 9 and a Setup Rating of 8.
- Good Uptrend Holding: The report states both the short-term and long-term trends for AS are positive. The stock is trading above all main moving averages (20, 50, 100, and 200-day), which are all moving up, a clear sign of a good uptrend. It also does better than 81% of its group in the Textiles, Apparel & Luxury Goods industry.
- Tightening Inside a Trend: A high Setup Rating of 8 shows the stock is in a forming tightening phase. The report notes prices have been trading in a band over the past month, letting the stock absorb its recent rises. This shape makes a possible "base" for its next move.
- Clear Risk Management Points: The technical study finds a clear support area near $39.47, made by a flat price level. For a trader, this gives a sensible area to place a stop-loss order, setting the risk of the trade if the expected breakout does not happen. The setup review also notes a recent "Pocket Pivot" signal, a volume-based sign pointing to buying by larger investors.
Coming Together of Factors
The investment idea for Amer Sports, from this filtering view, depends on the coming together of these factors. The high HGM Rating confirms the company is in the middle of a forceful fundamental growth period, marked by high earnings and positive analyst feeling. At the same time, the high TA and Setup Ratings show this fundamental force is being seen by the market, pushing the stock into a clear uptrend that is now waiting in a tightening. This wait gives a possible entry point for momentum investors who think the fundamental speed is strong enough to push the stock past resistance and into a new part of its rise.
Finding Like Chances
Amer Sports shows the kind of chance this joined filtering method tries to find. Investors wanting to see other stocks that now meet these needs of strong growth momentum paired with positive technical setups can view the results using the given High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for information only and is not investment advice, a suggestion, or a deal to buy or sell any securities. The study is based on given data and described filtering methods, which have built-in limits. Investing in stocks has risk, including the possible loss of original money. Always do your own review and think about talking with a qualified financial advisor before making any investment choices. Past results are not a guide for future results.
