For investors looking for a mix of strong earnings momentum and timely technical patterns, a combined screening method can be especially effective. By selecting for stocks with high ChartMill High Growth Momentum (HGM) Ratings together with high Technical and Setup Quality scores, the plan works to find companies that are both seeing quickening fundamental growth and are also technically set for a possible breakout. This technique combines the central ideas of growth investing with careful technical entry points, looking for chances where fundamental force is reflected by favorable price movement.
CELESTICA INC (NYSE:CLS) appears as a stock that matches this particular description, showing the traits that both growth and momentum investors usually look for.
A High Growth Momentum Profile
The ChartMill High Growth Momentum Rating for CLS is at a firm 7 out of 10, pointing to firm underlying growth measures. This rating brings together several important parts of a company's earnings and sales path, which are vital for momentum plans that depend on quickening business results.
- Outstanding Earnings Growth: The company's trailing twelve-month (TTM) EPS growth is a notable 54.6%. More significantly, the newest quarter displayed a year-over-year EPS rise of 70.3%, pointing to continued and possibly quickening profitability.
- Steady Revenue Increase: Top-line growth is also strong, with TTM revenue higher by 28.5%. The latest quarter saw sales increase 43.6% compared to the same time last year, showing firm demand for Celestica's supply chain solutions.
- Positive Surprises and Revisions: CLS has exceeded analyst EPS estimates in all of the last four quarters, with an average surprise of 6.9%. Also, analysts have been raising their estimates over the past three months, a main sign of growing positive feeling and anticipated future results.
- Margin Improvement: A sign of a high-quality growth situation is growing profitability. CLS shows clear advancement here, with its profit margin in the last reported fiscal year (6.72%) showing a major gain over the year before (4.44%) and a large rise from three years ago (2.01%).
These elements together support the stock's high HGM Rating. For momentum investors, this mix of high growth rates, positive surprises, and getting better margins indicates the company is in a strong operational upswing, which frequently comes before continued market outperformance.
Technical Force and a Favorable Setup
While firm fundamentals are necessary, finding a good entry point is also very important. According to the detailed ChartMill Technical Analysis report, CLS gets an 8 out of 10 for both its Technical Rating and its Setup Quality.
Technical Condition: The high Technical Rating shows the stock's firm long-term trend. Main positives include:
- A long-term trend scored as positive, with the stock doing better than 95% of all other stocks over the past year.
- Firm relative strength inside its industry (Electronic Equipment, Instruments & Components), doing better than 82% of its peers.
- The stock is trading above important moving averages, including its 20-day, 100-day, and 200-day SMAs, which are all in rising arrangements.
Setup Quality: The equal Setup Rating of 8 shows that this technical force is now paired with a consolidation pattern, giving a possible lower-risk entry area. The report mentions that volatility has gone down lately as prices have consolidated, making a clear support area near $308.73 and a resistance zone just above the current price around $344.41. The analysis also notes interest from large players in recent days, often a sign of a coming significant move.
This setup is exactly what the combined screen looks for: a fundamentally firm stock pausing inside a controlling uptrend, allowing for a specific risk point if the expected breakout above resistance happens.
Conclusion
CELESTICA INC shows a situation where strong fundamental momentum meets a technically favorable chart pattern. Its high HGM Rating highlights a business performing very well with quickening earnings and sales, while its firm Technical and Setup Ratings suggest the market is absorbing its large gains and could be getting ready for its next move higher. For investors using a growth-and-momentum-centered plan, CLS stands for the kind of candidate where business achievement and chart formation tell a matching story.
Find More Possible Setups This review of CLS came from a particular screen for high-growth momentum stocks in technical breakout forms. You can run this screen yourself and see refreshed results each day by going to the High Growth Momentum Breakout Setups page on ChartMill.
Disclaimer: This article is for information only and does not make up investment advice, a suggestion, or an offer to buy or sell any security. The review is based on given data and should not be the only reason for any investment choice. Investing has risk, including the possible loss of principal. Always do your own research and think about talking with a qualified financial advisor before making any investment choices.