For investors looking to join solid fundamental growth with well-timed technical entry points, a multi-factor screening method can be a useful instrument. By selecting for stocks with firm High Growth Momentum (HGM) ratings, very good technical health (TA Rating), and a high-quality chart setup (Setup Rating), the method tries to find companies that are not only increasing their earnings at a quicker rate but are also in a good position for a possible price move upward. This approach fits with ideas made common by growth-oriented methods like CANSLIM, which focus on both earnings momentum and technical condition. One stock that recently appeared from such a screen is BLOOM ENERGY CORP- A (NYSE:BE), a company in the clean energy technology field.
Fundamental Growth Momentum
Bloom Energy’s attraction for a high-growth momentum investor is based in its recent financial results, which receive a 6 out of 10 on the ChartMill High Growth Momentum Rating. This rating combines several important growth and momentum parts. The company is showing clear year-over-year increase and solid quarterly momentum.
- Very High Earnings Growth: The company’s trailing twelve-month (TTM) EPS has increased by a notable 284.2%. Even more convincing is the sequential speed increase seen in recent quarters. For example, EPS growth compared to the year-ago quarter rose from 117.6% three quarters ago to 266.7%, then to 1600.0%, before arriving at a still-firm 465.1% in the latest quarter.
- Firm and Quickening Sales: Revenue growth is also solid, with TTM sales up 37.3%. Quarterly sales growth has shown increasing speed, changing from 19.5% two quarters ago to 57.1% last quarter and 35.9% in the most recent report.
- Positive Surprises and Revisions: Bloom Energy has a complete record of exceeding both earnings and revenue estimates over the last four quarters, with an average earnings surprise of over 260%. Also, analysts have been adjusting their estimates higher, with the average revenue estimate for the next year growing by 36.1% over the last three months, a firm sign of belief in the company’s short-term outlook.
- Getting Better Cash Flow: Adding to the fundamental view, the company’s free cash flow per share has increased by 72.5% over the past year.
These parts, accelerating earnings and sales, steady positive surprises, and good analyst revisions, are exactly what the HGM rating is made to find, pointing to a company with solid short-term operational momentum.
Technical Condition and Setup Quality
While firm fundamentals give the "why" for investment, technical study can help with the "when." According to the detailed technical report, Bloom Energy shows very good technical health, getting a complete TA Rating of 10. The report states that both the short-term and long-term trends are positive, and the stock is doing better than 99% of the whole market and 96% of its peers in the Electrical Equipment industry. The stock is trading above all main moving averages (20, 50, 100, and 200-day), which are all in an upward arrangement, confirming the condition of the upward trend.
Perhaps more important for an investor looking for an entry point is the Setup Rating of 7. This shows the stock is forming a reasonable setup pattern. The technical study summary points to lower volatility as prices have been moving sideways after a large rise. The stock has been trading between about $131 and $181 over the past month and is now in the middle of that area. This sideways phase has helped ease overbought conditions and has created a visible support area near $139.73. For a trader, this setup allows for a specific entry point above the recent area (for example, above $180.91) with a sensible stop-loss level below the set support, effectively controlling risk on the trade.
Combination for the Growth-Momentum Investor
The mix of factors present in Bloom Energy makes it a notable candidate for the described method. The high HGM Rating confirms the company is in the middle of a solid earnings speed increase phase, a main driver for momentum investors. The complete TA Rating confirms this fundamental condition is being seen and shown in the stock’s price movement, as it leads the market. Finally, the high Setup Rating shows that, despite its firm rise, the stock is not too high but is instead moving sideways in a way that gives a planned, lower-risk entry chance for those expecting a continuation of the trend.
This joined view, where notable growth momentum meets confirmed technical condition and a clear chart pattern, is the main goal of screening for high HGM, TA, and Setup ratings at the same time.
Find Other Possible Setups
Bloom Energy shows one example of a stock that matches this specific high-growth, breakout-ready profile. For investors wanting to find other companies with similar traits, the screen that found BE can be reached directly: View the High Growth Momentum Breakout Setups Screen. This tool filters the market each day for securities that meet these strict requirements, giving a selected starting point for more study.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis is based on data provided and should not be the sole basis for an investment decision. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.