For investors looking to join solid earnings momentum with positive chart patterns, a multi-layered screening method can be very useful. By selecting for stocks that show good fundamental growth, sound technical condition, and a defined consolidation pattern, one can find possible choices ready for a move higher. This method fits with plans that focus on both the "what" (a company with sound fundamentals) and the "when" (a good technical point to enter). One stock now fitting these joined conditions is Collegium Pharmaceutical Inc (NASDAQ:COLL).
Fundamental Growth Momentum
Collegium Pharmaceutical receives a ChartMill High Growth Momentum Rating of 6, pointing to firm basic growth traits. This rating brings together several important measures that growth-oriented investors value.
- Solid Earnings Path: The company has shown notable year-over-year earnings growth. EPS over the trailing twelve months (TTM) rose by over 30%, and the newest quarter had a notable year-over-year EPS rise of almost 40%. Moving forward, analysts estimate the next quarter's EPS to rise by over 42%.
- Steady Revenue Increase: Top-line growth is also sound, with TTM revenue up more than 26%. Recent quarterly sales growth has been steadily firm, recorded at 31.4% in the most recent quarter.
- Positive Earnings Surprises: A sign of momentum is a company's capacity to top forecasts. Collegium has surpassed EPS estimates in each of the past four quarters, with an average surprise of 6.15%.
- Growing Profitability: The company's profit margin in the last reported quarter was 15.05%, a large increase from the 6.37% margin in the quarter before. This direction of gaining profitability is a key part of lasting growth.
These factors, accelerating sales, firm earnings growth, positive surprises, and margin increase, are exactly what the High Growth Momentum Rating is made to find, making COLL an interesting choice for investors using this method.
Technical Condition and Setup Quality
While fundamental momentum finds what to buy, technical study can help decide when to buy. Collegium's technical picture is very firm, as explained in its full technical report.
- Top Technical Rating: COLL has a leading ChartMill Technical Rating of 10 out of 10. This score shows very good condition across many time periods.
- Both its short-term and long-term trends are rated as positive.
- The stock is priced above all its main moving averages (20, 50, 100, and 200-day), which are all in an upward arrangement.
- It is doing better than 93% of all stocks on a yearly performance basis and 77% of its group in the Pharmaceuticals industry.
- Good Setup Pattern: With a Setup Rating of 7, COLL is now making a helpful consolidation pattern. After a large rise, the stock has been trading in a set range over the past month, letting volatility calm and forming a possible base for its next step.
- The technical study notes a clear resistance area between $48.89 and $49.34.
- A clear move above this area could point to the restart of the existing upward trend, giving a set entry point for momentum investors.
- The setup gives sensible points for both entry (above resistance) and exit (below nearby support), which is needed for risk control.
A Joining Chance
Collegium Pharmaceutical shows a situation where fundamental momentum and technical agreement join. The company is not only increasing its earnings and sales at a quick rate but is doing so while its stock chart shows leading traits and a clear setup. This pairing answers the main questions of growth investing: the stock is part of a company with strong business momentum, and its price action is giving an organized chance for entry after a time of consolidation. For investors using a growth-and-breakout plan, such joining is often a main goal.
Finding Like Chances
The screen that found Collegium Pharmaceutical can be a useful tool for discovering other possible choices. You can run this screen yourself to find more stocks with firm High Growth Momentum, high Technical Ratings, and quality Setup Patterns by going to the High Growth Momentum Breakout Setups Screen.
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 data and study given are based on sources thought to be dependable, but their correctness cannot be assured. Investing includes risk, including the possible loss of principal. You should do your own study and talk with a qualified financial advisor before making any investment choices.
