For investors looking to combine solid earnings momentum with positive chart patterns, a multi-layered screening method can be very useful. One such approach uses filters for stocks that show good fundamental growth traits, as measured by ChartMill's High Growth Momentum (HGM) Rating, while also showing technical soundness and a good price formation, shown by high Technical and Setup Ratings. This method tries to find companies that are not only seeing quickening business results but are also set in the market for a possible price rise, providing a combination of fundamental and technical support.
Fundamental Growth Momentum
Compañía de Minas Buenaventura S.A.A. (NYSE:BVN), a Peru-based polymetallic mining company, now has a High Growth Momentum Rating of 6. This score shows a good, though not maximum, level of short-term earnings and sales momentum. For investors focused on growth, this rating brings together several important measures that point to a company's operational speed increase.
- Notable Quarterly Earnings Jump: The latest quarter showed very high year-over-year EPS growth of over 1,146%. While this comes after a quarter of negative growth (-23.7%), such change is typical in cyclical fields like mining, and the large size of the recent gain is significant.
- Good Sales Growth: Revenue growth has been steadily positive, with the last quarter up 108% year-over-year and the next quarter expected to grow by 33.5%. This revenue strength supports profitability.
- Considerable Analyst Positive Outlook: Analysts have increased their earnings estimates for the next year by over 13% in the last three months, showing more belief in the company's short-term future.
- Notable Profit Margin Improvement: The company's profit margin in the last quarter was 38.8%, a large increase from 24.7% the prior quarter and a major recovery from 2.4% in the last fiscal year. Growing margins are a central part of the HGM rating as they show better operational efficiency and pricing ability.
These factors, strong sales, a large recent earnings gain, positive estimate changes, and margin growth, are exactly what the High Growth Momentum Rating is made to find, pointing out companies with fundamental business momentum.
Technical Soundness and Setup Condition
Apart from the fundamentals, BVN shows a positive technical view. According to ChartMill's detailed technical report, the stock gets a high Technical Rating of 9 and a Setup Rating of 7.
The Technical Rating of 9 puts BVN in the group of market leaders from a trend view. The report states that the long-term trend is positive, and the stock has done better than 96% of the market over the past year. It trades above its important moving averages (50-day, 100-day, and 200-day), which are all in rising arrangements. This rating answers the question of which stock to look at by confirming its continued upward trend and relative performance.
The Setup Rating of 7 addresses the question of when. It shows that after a large rise, the stock's price movement has started to settle. The report describes a trading area between about $35.43 and $44.67 over the last month, with the current price near the middle of this area. This settling has lowered short-term change and formed a possible base pattern. A clear support area is found around $37.02, giving a sensible place for a stop-loss order, while almost no overhead resistance is seen above the current price. This formation gives a defined risk level for traders waiting for a possible move upward from the settling.
A Combined Chance
The mix of these ratings makes BVN a notable candidate for the high-growth momentum method. The HGM Rating of 6 confirms the company is in a time of fundamental speed increase, a main force for future stock gain. The Technical Rating of 9 tells investors that this fundamental strength is already being seen by the market in the form of a strong existing uptrend. Finally, the Setup Rating of 7 suggests the stock may be resting within that uptrend, giving a possible entry point during a time of settling instead of after a steep move.
This combined view lets investors look past a single measure. A company can have excellent growth but a stretched stock price, or a perfect chart but worsening fundamentals. Screening for all three conditions tries to find the point where good business performance meets a technically positive and well-timed chart pattern.
Find Other Possible Formations
The screen that found Compañía de Minas Buenaventura is made to regularly find similar chances where high growth momentum lines up with positive technical formations. Investors can run this screen themselves to find other possible candidates meeting these conditions. You can find more results from this High Growth Momentum Breakout Setups screen here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. 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.
