For investors aiming to achieve substantial price gains, a systematic plan that combines solid core business qualities with positive price trends can be an effective method. One technique involves searching for stocks showing strong expansion, good fiscal condition, and earnings, which are then examined more closely for encouraging technical patterns indicating a potential rise. This two-part review seeks to find firms that are both operationally healthy and growing and are also receiving favorable attention from the market, shown by their price moving beyond previous trading levels.
ANGLOGOLD ASHANTI PLC (NYSE:AU) presents an interesting example for this plan. As a major gold producer with a varied set of mines in many countries, its recent results and measures fit well with the requirements of a solid expansion stock positioned for a technical move higher.
Fundamental Strength: The Base for Expansion
The initial search for this plan focuses on solid expansion, earnings, and fiscal condition, qualitative factors needed for continued growth. AngloGold Ashanti’s fundamental report, which you can study in detail here, shows a company performing very well.
- Strong Expansion Path: The company gets a high Expansion Rating, supported by very strong recent results. In the last year, Earnings Per Share (EPS) increased by over 517%, while Revenue rose by 26.4%. For the future, experts predict continued good expansion in both earnings and revenue.
- High Earnings Ability: AngloGold has an Earnings Rating that ranks it very well in its sector. Important profit measures are notable and improving:
- Profit Margin: 24.6% (higher than 89% of sector companies)
- Operating Margin: 38.0% (higher than 88% of sector companies)
- Return on Equity: 32.2% (higher than 96% of sector companies)
- Good Fiscal Condition: A stable Health Rating points to a balance sheet that can fund future expansion. The company keeps a careful Debt/Equity ratio of 0.28 and a good Current Ratio of 2.58, indicating enough cash for near-term needs. Importantly, its Return on Invested Capital is much higher than its cost of capital, proving it is building real value for shareholders.
These fundamental qualities are vital for the expansion investing part of the plan. They show that the company’s increasing share price is backed by real business results, fast-growing earnings, high returns on investment, and a safe fiscal position, not just market guesswork.
Technical Pattern: The Trend Indicator
While solid fundamentals give the "reason," technical study helps find the "timing" by seeing changes in market opinion. AngloGold Ashanti’s technical view, covered in its full report here, indicates the stock is in a solid upward trend and might be pausing before another move.
- Solid Upward Trend Verified: The stock gets a top-level Technical Rating. Both its near-term and long-term trends are seen as positive, with the share price trading above its important moving averages (20-day, 50-day, 100-day, and 200-day SMAs), which are all moving up together.
- Pause Near Highs: After a large gain in the past year, the stock has been changing within a set band over the last month. It is now testing the top limit of this band, close to its 52-week peak. This kind of pause after a good rise can sometimes come before a move higher.
- Favorable Volume and Pattern: The technical study notes a recent "Pocket Pivot" signal, a formation that shows buying as the price increases with more volume than normal. With almost no price barriers above and a set support area below, the technical pattern offers a clear view of risk and potential gain for traders looking for a clear move above the recent pause.
This technical state is exactly what the plan looks for: a fundamentally solid stock that is both in a clear upward trend and showing a formation that hints at a possible increase in price.
Valuation Setting
Even after its notable rise, AngloGold seems fairly priced. While its standard P/E ratio is near 20, its expected P/E is a lower 10.7. Compared to both the wider S&P 500 and most companies in the Metals & Mining sector, the stock is seen as low-priced based on future earnings projections. This fair price, along with its high expansion rate, offers a buffer that is attractive for investors focused on growth.
Conclusion
AngloGold Ashanti PLC shows the combined effect looked for by a mixed fundamental and technical search method. The company displays very fast earnings expansion, sector-leading earnings ability, and a very stable balance sheet, the signs of a solid expansion stock. At the same time, its price chart shows a stock in a solid, continuing upward trend that is now pausing near highs, forming a potential technical pattern for a rise. This match suggests market trend is starting to mirror the company’s core fundamental gains.
Interested in finding other stocks that fit this "Strong Expansion with Good Technical Pattern" profile? You can use the same search that found AU and look for more possible options here.
Disclaimer: This article is for information and learning only. It is not a suggestion to buy, sell, or keep any security, and it does not consider your own investment goals, financial position, or risk comfort. All investment choices have risk, including the possible loss of the original amount. Always do your own complete study and think about talking with a qualified financial advisor before making any investment choices.
