CORECIVIC INC (NYSE:CXW) Shows High Growth Momentum and Technical Breakout Setup

CORECIVIC INC (NYSE:CXW) has appeared on a specialized screen made to find stocks that fit high growth momentum investing ideas while showing good technical breakout patterns. This screening method uses three proprietary ChartMill ratings: a High Growth Momentum Rating above 4, which finds companies with good earnings and sales momentum; a Technical Rating above 7, confirming the stock is in a good uptrend; and a Setup Rating above 7, indicating the price is consolidating in a way that suggests a potential breakout is near. This multi-layered method tries to find companies with both fundamental growth reasons and technically helpful chart patterns.

High Growth Momentum Fundamentals

For investors using high growth momentum strategies, the fundamental health and speed of a company are very important. CORECIVIC shows several key characteristics that add to its good High Growth Momentum Rating of 6. The company is displaying notable momentum in its profitability, a main point for this investing style which focuses on earnings acceleration and positive surprises.

• Exceptional EPS Growth: The company has reported impressive year-over-year earnings per share growth.
  • EPS Growth (TTM): 58.3%
  • Most Recent Quarter (Q2Q) EPS Growth: 111.8%
  • Previous Quarter (Q2Q) EPS Growth: 187.5%
• Positive Estimate Revisions and Beats: Analyst opinion has become positive, and the company has regularly beaten expectations.
  • Average EPS Estimate Beat (Last 4 Quarters): 86.2%
  • Next Year EPS Estimate Revisions (3 Months): +20.1%
• Expanding Profitability: The company is not just increasing sales but is becoming more profitable, a signal of operational efficiency.
  • Profit Margin (Last Quarter): 7.2%, up from 4.0% two quarters before.
  • Free Cash Flow Per Share Growth (1Y): 53.6%

These metrics are important to the high growth momentum philosophy, as they show a company that is not only growing but is also beating market predictions and having its future outlook improved by analysts, a mix that often comes before further price increases.

Technical Strength and Market Position

Besides the fundamental story, a stock's technical condition is important for timing entries. According to the detailed technical report, CORECIVIC displays a good technical profile with a rating of 7. The stock is placed well within the wider market context, where both the S&P 500's long-term and short-term trends are positive.

Key technical points include:

• Positive Trend Alignment: Both the long-term and short-term trends for CXW are positive, showing continued buying pressure.
• Good Relative Strength: The stock is doing better than 84% of its peers in the Commercial Services & Supplies industry, a sign of market leadership.
• Respectable Performance: CXW has reported good returns over the past year, doing much better than the wider market.

This technical condition is necessary because it confirms that the fundamental growth story is being noticed and acted on by the market, providing support for the stock's price action.

Quality Setup for a Potential Breakout

The final part is the setup quality, which deals with the "when to buy" question. CORECIVIC currently has a Setup Rating of 7, suggesting it is forming a constructive pattern. The analysis points to lower volatility as prices consolidate in a range, a common step before a notable move.

• Consolidation Zone: The stock has been trading between about $19.39 and $21.84 over the last month and is currently testing the upper part of this range.
• Clear Support and Resistance: The technical report finds a clear support zone around $21.10 and resistance near $21.78. A clear break above resistance could signal the beginning of a new upward move.
• Defined Risk Management: The consolidation pattern allows for a logical placement of a stop-loss order below the support level, helping to control risk on any trade start.

This setup is especially interesting for momentum investors as it offers a potential entry point with a defined risk level, fitting with disciplined trading strategies that aim to profit from breakouts from consolidation periods.

Conclusion

CORECIVIC INC presents a notable case for investors using a high growth momentum strategy. The company's good earnings acceleration, positive analyst revisions, and expanding profit margins meet the fundamental criteria looked for by growth investors. At the same time, its positive technical trend, market-leading relative strength, and high-grade consolidation setup provide a technically sound background for a potential breakout. This combination of fundamental momentum and technical placement makes CXW a stock worth more examination for those following this method.

For investors interested in finding other stocks that meet similar criteria, this screen for High Growth Momentum Breakout Setups is updated regularly and can be a useful beginning point for more research.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. All investing involves risk, including the possible loss of principal. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.