For investors looking for a disciplined method for growth, joining fundamental momentum with technical timing can be an effective strategy. The process involves screening for stocks displaying solid short-term earnings and sales speed, important parts of high-growth momentum investing, while also showing a positive technical chart pattern ready for a possible breakout. This two-part method tries to find companies with not just better business basics but also stock prices that are settling after a rise, pointing to a more likely entry point for a continued upward move.
CareTrust REIT Inc. (NYSE:CTRE) appears as a candidate matching this particular profile. The real estate investment trust, which concentrates on healthcare-related properties, displays a positive mix of speeding financial performance and a technically good price structure.
Fundamental Growth Momentum
A central part of the high-growth momentum strategy is finding companies with speeding earnings and sales, which hints at increasing business momentum. CareTrust’s recent quarterly reports show this dynamic plainly.
- Strong Earnings Growth: The company’s earnings per share (EPS) growth on a year-over-year quarterly basis has been solid and speeding up. The latest quarter showed growth of 66.7%, which came after a notable 400% jump in the previous quarter. This sequence of high, back-to-back speed is a main signal momentum investors look for.
- Solid Sales Increase: Revenue growth has followed a similar upward path. Recent quarterly sales growth numbers have risen from 45.6% to 63.3% and up to 71.2% in the last reported quarter. This steady speed shows rising demand and pricing ability within its portfolio.
- Yearly Growth and Margin Improvement: On a yearly basis, the trends are also positive. EPS for the trailing twelve months has grown over 90%, while revenue is up nearly 60%. Also, the company’s profit margin has improved noticeably, from 24.5% in the prior fiscal year to 42.1% in the most recent full year, showing better operational efficiency.
These measures together add to CareTrust’s High Growth Momentum Rating of 6. This score shows good performance across growth, speed, and margin improvement standards, putting it on the watchlist for strategies like CANSLIM that focus on such fundamental momentum.
Technical Strength and Setup Quality
While good fundamentals give the "why" for a stock’s possibility, technical analysis helps with the "when." According to the detailed ChartMill Technical Report, CareTrust shows very good technical condition and a clear setup.
- Solid Technical Rating of 9: This very high score shows the stock is in a confirmed uptrend across both short-term and long-term periods. The report states that CTRE is doing better than 91% of its peers in the Diversified REITs industry and 86% of all stocks over the past year. The long-term trend is positive, with the stock trading above its important moving averages (50-day, 100-day, and 200-day), which are all going up, a typical sign of continued bullish momentum.
- Top-Level Setup Rating of 9: Maybe more important for timing an entry, the stock also gets a high setup score. This rating finds consolidation patterns where volatility lessens and a clear support level forms, giving a sensible area for a stop-loss order. The analysis shows CTRE has been trading in a range between about $35.83 and $38.32, tightening near the top of this range. A resistance area is noted just above the current price around $37.71-$37.77.
- Clear Risk/Reward Situation: The technical report describes a possible breakout setup. A move above the $37.78 resistance could signal a continuation of the uptrend, with a proposed stop-loss placed below the support area near $36.02. This gives a measurable and fairly tight risk limit, an important benefit when joining momentum investing with technical discipline.
A Joining Opportunity
CareTrust REIT presents a case where fundamental momentum and technical position agree. The company’s speeding earnings and sales growth give a fundamental catalyst that can support further price gains. At the same time, the stock’s technical chart shows it is absorbing its earlier gains in a good consolidation, gathering energy for a possible next step up. This agreement is exactly what the combined screening process is made to find: fundamentally sound companies at a technically good moment.
For investors wanting to look at other stocks that meet these standards of high growth momentum paired with positive technical breakout setups, the screen used to find CTRE is ready to use. You can find more possible candidates through this High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for information only and does not make up investment advice, a recommendation, or an offer to buy or sell any security. The analysis is based on given data and should not be the only base for an investment decision. Investors should do their own research and think about their personal financial situation and risk tolerance before making any investment. Past performance does not show future results.
