Popular Inc. (NASDAQ:BPOP) is currently demonstrating the kind of dual strength that high growth momentum investors look for: a potent combination of accelerating earnings and a technically sound chart setup. Using a screening strategy that combines a High Growth Momentum Rating (HGM) of at least 4 with a strong technical profile, specifically a Technical Rating above 7 and a Setup Rating above 7, we can identify stocks that are not only growing but are also poised for a potential breakout. This method, rooted in growth investing principles like CANSLIM and Minervini strategies, filters for companies with solid earnings momentum and a favorable risk/reward entry point, making it a valuable tool for traders seeking to benefit from the next stage of an uptrend.
Popular Inc. fits this profile exceptionally well, earning a High Growth Momentum Rating of 6 out of 10 and a perfect Technical Rating of 10. The fundamental picture is driven by strong earnings growth. Over the last twelve months, earnings per share (EPS) grew by 41.7% (TTM), with the most recent quarter alone seeing a 47.7% jump compared to the same quarter last year. This consistency is further highlighted by the company’s ability to beat EPS estimates in each of the last four quarters, with an average surprise of nearly 15%. This earnings acceleration is a foundation of the high-growth strategy, as it signals a business that is not just growing, but gaining momentum.
Examining the numbers more closely, the quality of this growth is reinforced by expanding profit margins. The profit margin increased from 25.8% in the previous quarter to 28.3% in the latest reported quarter, indicating improving operational efficiency. Even more encouraging for future performance is the substantial revision activity from analysts. Over the last three months, estimates for next year’s EPS have been revised upward by 5.7%, while revenue estimates for the same period have been boosted by a striking 13.8%. This combination of strong past performance, positive surprises, and upward estimate revisions is exactly what the HGM rating is designed to capture.
While the fundamentals provide the "what" to buy, the technical setup answers the "when." Popular Inc.’s technical report is outstanding. It holds a perfect Technical Rating of 10, driven by a positive long-term and short-term trend. The stock is outperforming 93% of all stocks in the Banks industry and is currently trading near its 52-week high, a classic characteristic of market leaders. The strength is broad-based, with all major moving averages (20-day, 50-day, 100-day, and 200-day SMA) in a rising trend.
Complementing this technical strength is a Setup Rating of 7, indicating a viable consolidation pattern is forming. The stock has been trading in a range between roughly $133 and $153, and it is currently approaching the upper end. The technical analysis reveals a resistance zone just above the current price at $150.34. This tight consolidation near resistance is a classic pre-breakout pattern. A potential buy stop order could be placed at $150.76—just above this resistance—with a stop-loss at $144.53 below the 10-day low. The calculated worst-case loss is limited to 4.1%, offering a well-defined risk for the trade.
The alignment of strong earnings growth, positive analyst revisions, a perfect technical rating, and a concrete setup pattern makes Popular Inc. a prime candidate for high growth momentum investors. This screen effectively bridges the gap between identifying high-quality growth stocks and finding a disciplined entry point.
For investors looking to replicate this strategy and find more stocks exhibiting this potent combination of momentum and technical readiness, you can run the full screen yourself. Click here to access the High Growth Momentum Breakout Setups Screen and find the next potential opportunities.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks and other financial instruments involves risk. You should perform your own analysis and consult with a qualified financial professional before making any investment decisions. Past performance is not indicative of future results.