Investors looking to find companies with both good business momentum and positive price movement often use a mix of technical and fundamental analysis. One such tactic looks for stocks showing good growth traits, backed by sound finances and profit, while also showing technical breakout patterns. This approach tries to find stocks where better fundamentals may be meeting positive market feeling, possibly pointing to a continued upward move. A recent scan using this logic has pointed to Globus Medical Inc - A (NYSE:GMED) as a stock deserving more attention.
A Base of Good Fundamentals
For a growth stock to maintain a breakout, a good fundamental base is important. ChartMill's fundamental analysis report gives GMED a total score of 6 out of 10, with especially good marks in important growth and financial health areas. This matches the scan rules that focus on good growth along with acceptable profit and health.
- Notable Growth Path: GMED's growth score of 7 is a central part of its attraction. The company has shown notable expansion, with Revenue increasing at an average pace of 26.25% over recent years and Earnings Per Share (EPS) rising by 13.19% each year. While future growth is thought to slow, analysts still forecast a good 10.62% yearly EPS growth and 8.32% yearly Revenue growth, showing the company's expansion story is still present.
- Good Profit and Financial Health: The company gets a 7 for both Profit and Financial Health. Main strong points include:
- Better Margins: GMED's Profit Margin (15.30%) and Operating Margin (17.37%) are better than most of its competitors in the Health Care Equipment & Supplies industry.
- Excellent Solvency: With no debt on its balance sheet and a Debt-to-Equity ratio of 0.00, the company has a very strong balance sheet. Its Altman-Z score of 11.89 and good liquidity ratios (Current Ratio of 4.13) further highlight its financial soundness.
This mix of high growth, high profit, and a clean balance sheet gives the fundamental support that can help a continued price rise, which is exactly why these measures are key to the growth stock scan method. You can see all the details in the fundamental analysis report for GMED.
A Technical View Set for Continuation
A good fundamental story is most effective when matched by the market's price movement. ChartMill's technical analysis gives GMED a score of 7, stating that "the technical picture looks good in both the medium and short term time frames."
- Positive Trend Setup: The long-term trend for GMED is seen as positive, while the short-term trend is neutral. This indicates the stock is in a time of consolidation inside a larger upturn, a typical stage before a continuation move.
- Consolidation Close to Highs: The stock is now trading in the higher part of its 52-week range, a sign of relative strength particularly when compared to the S&P 500, which is trading in the lower part of its yearly range. This better performance against the wider market is a positive sign.
- Clear Support and Setup: The analysis finds a main support area around $89.69, made from a mix of trend lines and moving averages. After a recent pullback from highs near $101, the stock is now testing this support area. The report states that "prices have been consolidating lately" and that this pullback "may present a nice opportunity for an entry," if the support level holds.
The existence of a set support level during a consolidation phase inside a long-term upturn is the technical "breakout pattern" part the scan looks for. It shows a possible pause where the stock builds strength before trying its next move higher. For a full view of the chart patterns and trade setup, see the technical analysis report for GMED.
Why the Mix is Important
The scan tactic works because it looks for alignment. A technical breakout is much more meaningful if the company breaking out is also speeding up its earnings and sales, not just moving on speculation. On the other hand, good fundamental growth may not be recognized by the market for long times unless the price chart shows signs of accumulation and growing investor attention. In GMED's case, the fundamental reports confirm the company is a high-quality grower with very good financials, while the technical analysis suggests the market may be getting ready for its next upward move after a time of pause.
Finding More Chances
GMED shows one result from a methodical search for stocks where good fundamentals meet positive technical setups. This structured approach can help find other possible chances in the market.
For investors wanting to see other stocks that now match this "Strong Growth Stocks with good Technical Setup" profile, you can see the full scan results here.
Disclaimer: This article is for information only and is not financial advice, a suggestion, or an offer or request to buy or sell any securities. The analysis shown is based on data and reports from ChartMill and should not be the only reason for an investment choice. Investing in stocks has risk, including the possible loss of the main amount. Always do your own complete research and think about talking with a qualified financial advisor before making any investment choices.
