Ensign Group Inc (NASDAQ:ENSG) Shows High Growth Momentum and Strong Technicals

A systematic method for finding high-potential growth stocks combines strict technical analysis with fundamental momentum screening. The approach used here applies Mark Minervini's Trend Template to find securities showing strong upward price trends, then adds a High Growth Momentum (HGM) rating to make sure these technically good companies also have the underlying financial speed that often supports continued price gains. This two-part method aims to identify leaders early in their growth periods by verifying both price strength and business momentum.

Meeting the Minervini Trend Template

Ensign Group Inc (NASDAQ:ENSG) shows a strong technical profile by meeting the main points of the Minervini Trend Template, which is made to find stocks in a confirmed Stage 2 uptrend. This template's value is in its capacity to filter for securities with established and gaining momentum, a key part of Minervini's SEPA methodology that centers on "Specific Entry Point Analysis" during trending markets.

A close look at the technical data confirms ENSG's fit with the template's main conditions:

• Price Above Key Moving Averages: The current price trades well above its rising 50-day ($169.51), 150-day ($149.75), and 200-day ($145.71) simple moving averages.
• Upward-Sloping Long-Term Trends: Both the 150-day and 200-day moving averages have a positive slope, confirming the long-term trend's health.
• Bullish Moving Average Alignment: The shorter-term 50-day moving average is positioned above both the longer-term 150-day and 200-day averages, indicating gaining momentum across timeframes.
• Significant Price Appreciation: The stock is trading approximately 50% above its 52-week low of $118.73, demonstrating strong recovery and growth.
• Proximity to Highs: With a current price near $178, ENSG is trading within 1% of its 52-week high of $179.27, a characteristic of market leaders.
• Superior Relative Strength: The stock has a ChartMill Relative Strength (CRS) rating of 84.85, indicating it is doing better than nearly 85% of the entire market, a key filter Minervini highlights should ideally be above 70.

Fundamentals Driving High Growth Momentum

Beyond a clean chart, ENSG's eligibility for growth investors is confirmed by its strong and gaining fundamental performance. The High Growth Momentum rating examines a company's earnings, sales, and profitability trends to find businesses going through a fundamental breakout, which often serves as the trigger for a continued super-performance period.

The provided data shows several areas of fundamental strength:

• Earnings Growth Acceleration: ENSG shows a clear pattern of gaining earnings growth on a quarterly basis. The most recent quarter saw EPS grow 20.45% year-over-year, up from 16.92% the prior quarter and 16.41% the quarter before that. This sequential gain is a notable sign of building momentum.
• Strong Sales Expansion: Revenue growth is also strong and gaining, with the last quarter coming in at 18.48% year-over-year. This is an increase from the 16.12% and 15.49% growth rates in the preceding quarters.
• Positive Analyst Revisions: The average estimate for next year's earnings has been revised upward by 1.40% over the last three months, suggesting increasing analyst confidence in the company's prospects.
• Strong Cash Flow Generation: The company shows notable free cash flow growth of over 142% on a trailing twelve-month basis, providing financial flexibility and confirming the quality of its earnings.

Technical Health and Setup Assessment

The complete technical report from ChartMill gives ENSG a high Technical Rating of 9 out of 10, reflecting its very good technical health. The report notes that both long-term and short-term trends are positive and that the stock is a leading performer within its industry. However, the Setup Rating is a more moderate 6, suggesting that while the stock is technically good, its recent price movement has been somewhat volatile, making an ideal, low-risk entry point less clear at this exact moment. The stock is currently testing a resistance zone around $178.01, and a clear breakout above this level could possibly improve the setup quality.

For a closer look into the technical structure, including detailed support and resistance zones, you can review the full technical analysis report for ENSG.

Conclusion

Ensign Group Inc presents a strong case for investors following a high-growth momentum strategy. The stock meets the strict technical filters of the Minervini Trend Template, confirming it is in a powerful Stage 2 advance. At the same time, its underlying business shows the signs of a high-growth company, with gaining earnings, strong sales expansion, and positive analyst sentiment. While the immediate setup suggests patience for a best entry, the combination of technical and fundamental strength makes ENSG a stock worth close watching.

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This analysis was created using a systematic screen made to find stocks matching specific technical and fundamental growth conditions. For investors looking for more opportunities that fit this "High Growth Momentum + Trend Template" profile, you can explore the live screen results here.

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