Investors aiming to benefit from large price gains often use a method that combines solid core business progress with good market timing. One such tactic is to look for stocks showing strong basic growth, marked by quickening earnings and sales, while also showing encouraging technical breakout shapes on their price charts. This two-part review tries to find companies that are both financially sound and growing and are also near a possible upward shift as seen by the market. The aim is to locate chances where basic power and technical force come together, possibly marking a time of superior results.
Gold Fields Ltd. (NYSE:GFI) offers a noteworthy example for this method. The South African gold miner was chosen by a filter made to find solid growth stocks with good technical arrangements, and a detailed look at its reports shows why it fits these strict conditions.
Basic Growth Power
The foundation of this method is finding companies with outstanding and lasting growth measures. Based on its basic analysis report, Gold Fields gets a high-level Growth Rating of 9 out of 10. This grade is fueled by very strong recent results and positive future estimates.
- Very Strong Past Growth: The company's Earnings Per Share (EPS) rose by almost 197% in the last year, while sales went up by more than 50%. This shows a significant operational rise.
- Good Future View: Experts think this force will keep going, with EPS predicted to grow by about 53% each year in the near future, together with an estimated 25% yearly sales growth.
- Core Profitability: This growth does not hurt margins. GFI has an excellent Profitability Rating of 9, with an operating margin above 53% and a return on invested capital of 22.56%, putting it with the best in its field.
This basic view is key because, as described in the setting of growth investing, lasting increases in earnings and sales are the main driver for long-term stock price gains. A company needs a big enough market and the operational skill to use it; GFI's measures indicate it is performing well in the gold mining industry.
Technical Breakout Chance
While basics give the "why," technical study gives hints on the "when." The technical analysis report for GFI shows a stock in a solid upward trend, getting a full Technical Rating of 10 and a Setup Rating of 8.
- Upward Trends: Both the short-term and long-term trends are labeled upward, a sign of steady buying pressure across different time frames.
- Narrowing Near Highs: The stock is now trading near its 52-week high, which often works as a barrier. The report notes lower volatility with prices moving in a small recent band, hinting at a gathering of force.
- Clear Arrangement: The study finds a clear barrier level just above the present price. A clear move above this point might start the "breakout" the method looks for, with a set safety area below to handle possible downside.
This technical view is significant because it shows market feeling and price finding. A solid growth stock stuck in a downward trend or sideways movement may need waiting. A good technical arrangement, however, can show the market is starting to see the basic worth, possibly leading to a fast price change.
Value and Financial Soundness Setting
A full view needs looking past just growth and price movement. GFI's value and financial soundness give setting for its risk and gain profile.
- Good Relative Value: Even with its high growth, GFI's Valuation Rating is a solid 8. Its Price-to-Forward Earnings ratio of 9.12 is much lower than both the S&P 500 average and most of its industry rivals, hinting the growth story may not be fully reflected in the price.
- Sufficient Financial Soundness: The company's Financial Health Rating is a 6. While there are some small worries about liquidity ratios, these are balanced by very good solvency measures, including a sound Altman-Z score and a workable debt level well-supported by free cash flow. For a growth-focused method, the focus is on making sure the company is not in financial trouble, which GFI's profile supports.
Summary
Gold Fields Ltd. (GFI) shows the kind of chance sought by a joined growth and technical breakout method. It has the basic driver of remarkable earnings growth and high profitability. This force is reflected in the technical charts, which show a stock in a strong upward trend and narrowing near highs, offering a possible breakout arrangement. When joined with a fair value compared to its growth and sufficient financial soundness, GFI makes a case for being a solid growth stock that is also technically ready for its next possible step up.
This study was done by using a set filter for "Strong Growth Stocks with good Technical Setup Ratings." You can find more investment ideas that fit this exact method by looking at the filter settings directly here.
Disclaimer: This article is for information and learning only and is not a suggestion to buy, sell, or keep any security. The study is based on data and reports given by other parties. Investing has risk, including the chance of losing the original amount. Always do your own complete research and think about your personal money situation and risk comfort before making any investment choices.
