For investors aiming for notable capital gains, a systematic method frequently includes merging the prospective view of fundamental study with the timing cues from technical study. One specific tactic centers on finding solid growth stocks that are also showing encouraging technical breakout formations. This approach tries to locate firms with sound basic business momentum, shown by quickening earnings and sales, while watching for the stock's price movement to indicate a possible entry moment. The aim is to take part in the next phase of a growth narrative as the stock moves out of a time of sideways movement, possibly presenting a good risk-reward arrangement. A recent filter using this logic has pointed out CBRE GROUP INC - A (NYSE:CBRE) for closer review.
A Solid Fundamental Growth Picture
Fundamentally, this tactic needs a firm showing better growth measures than similar companies. Based on ChartMill's fundamental analysis report, CBRE gets a Growth Rating of 7 out of 10, signaling a firm path. The firm's latest results and future view supply the needed support for a growth investment idea.
- Notable Recent Growth: In the last year, CBRE has recorded an Earnings Per Share (EPS) rise of 43.41% and a Sales increase of 14.61%. This short-term speed gain is a main sign of operating force.
- Continued Past Growth: Reviewing the last several years, the firm has kept a constant yearly Sales growth rate of 8.40%, showing a capacity to regularly grow its top line.
- Quickening Future Projections: Maybe most interesting for growth investors is the forward view. Experts forecast an average yearly EPS growth of 17.98% and Sales growth of 9.04% for the next years. Importantly, the EPS growth rate is predicted to speed up relative to its past rate.
This mix of solid past results and a quickening future earnings view is exactly what growth investors look for. It implies the firm is not only performing well now but is also set to gain larger market chances later. The tactic stresses this basic strength as a required base, making sure the technical formation has a fundamental story to back a continued move.
Supporting Fundamentals: Earnings and Financial State
While growth is the main force, the tactic also sorts for acceptable earnings and financial state to reduce risk. A firm can grow fast but use cash quickly, or it can be profitable but carry high debt. CBRE's picture shows equilibrium in these parts, getting an Earnings Rating of 6 and a Financial State Rating of 5.
The firm's earnings are supported by good returns on capital. Its Return on Equity (ROE) of 14.39% and Return on Invested Capital (ROIC) of 6.76% rank with the top in the Real Estate Management & Development field, doing better than over 85% of similar firms. This shows management is using shareholder capital well to create profits. Financially, CBRE shows a varied but workable picture. Its Altman-Z score of 3.62 points to a low near-term bankruptcy chance, and its debt amounts are mostly similar to field averages. While cash ratios are less than similar firms, they stay at levels usually seen as enough to cover near-term needs. This full picture backs the growth story by showing the expansion is reached with sensible financial control.
An Interesting Technical Formation
The fundamental story gives the "why," but the technical study suggests the "when." ChartMill's technical analysis report gives CBRE a solid Technical Rating of 8 and, more key for this tactic, a Setup Rating of 8. This points out a good meeting of price action parts.
- Good Trend Agreement: Both the long-term and short-term trends for CBRE are good, a positive agreement that hints at continued upward motion across different time frames.
- Sideways Movement Near Highs: The stock is now trading close to its 52-week high, which is usually a mark of force. It has been moving sideways within a band over the last month, letting it absorb its recent rises.
- Developing Breakout Formation: The report mentions a recent "Pocket Pivot" signal, a price rise on volume greater than the highest down volume of the previous ten days. This is often seen as quiet, institutional buying during a sideways phase, possibly coming before a more clear breakout.
This technical view is vital for the tactic. It tries to find stocks that are not just growing basically but are also at the start of a new upward price shift. The mix of a solid basic trend, sideways action after a rise, and signs of buying creates a formation where a breakout above the recent resistance could signal the next step of the climb.
Price Assessment in Perspective
With a P/E ratio near 28, CBRE could seem costly initially. However, growth investing often means paying more for future possibility. The price context is notable: CBRE's P/E is actually lower than about 73% of its field peers. Also, when including its expected earnings growth, its PEG ratio shows a fair price. For growth-focused tactics, the main focus stays on the growth path and technical motion, with price serving as an extra check to confirm the cost is not wildly off from facts. In CBRE's situation, the price seems to match its growth premium without being too high relative to its sector.
Summary and Next Steps
CBRE Group offers an interesting example for a merged growth and technical breakout tactic. The firm shows the needed basic qualities: very good recent growth, a solid forward view, and firm earnings backed by acceptable financial state. At the same time, its stock chart displays a positive technical shape, with good trends and a sideways formation that could be preparing for a move higher. This match of a solid business story with hopeful price action is just what the filter logic tries to find.
It is notable to recall that no single filter or study assures a win. Investors should think about wider market states, sector-specific dangers, and firm-specific news, like coming earnings statements, before any investment choice.
This review of CBRE was produced from a particular investment filter. If this logic fits your investment style, you can review other stocks that now match similar "Strong Growth Stocks with good Technical Setup Ratings" rules by using this set stock screener.
Disclaimer: This article is for informational and educational reasons only and does not form financial, investment, or trading guidance. The information given should not be used as the only base for any investment choice. You should do your own full research and talk with a qualified financial advisor before any investment. Past results are not a guide for future results.
