Investors looking to join the momentum of technical breakouts with the foundational strength of fundamental growth frequently use a combined analysis method. This method tries to find companies that are showing strong price movement and possible chart patterns while also having sound and improving business basics. The aim is to locate stocks where better financial health and earnings create a base for the price momentum indicated by the technical picture. One company now noted by this method is Granite Construction Inc (NYSE:GVA).
A Sound Fundamental Growth Picture
Central to this investment method is a need for a company to show clear, improving growth. Granite Construction’s fundamental report shows it fits this need, receiving a good Growth Rating of 7 out of 10. The company is displaying notable momentum in its net profit, an important measure for growth investors.
- Earnings Growth: The company's Earnings Per Share (EPS) rose by a notable 61.71% over the last year. Even more convincing is the multi-year average annual EPS growth of 32.75%, pointing to a continued time of solid profit growth.
- Future Expectations: Analysts forecast this growth to persist, with predicted annual EPS growth of 22.48% in the next years. Also, sales growth is forecast to increase to an average of 9.62% each year, up from its recent historical rate.
- Valuation Context: Even with this good growth path, the stock seems fairly valued compared to its industry. Its Price/Earnings and Price/Forward Earnings ratios are lower than about 85-89% of similar companies in the Construction & Engineering sector. This mix of good growth and comparative value is exactly what filters try to find, as it implies the market may not have completely accounted for the company's future possibility.
The company's fundamental health and profit ratings are both a neutral 5, showing an adequate but steady financial standing within its industry, which backs the growth story without showing major concerns. You can examine the complete details in the Granite Construction Fundamental Analysis report.
A Favorable Technical Picture
For the technical part of this method, the attention is on finding stocks that are gathering force for a possible breakout, often after a time of sideways movement. Granite Construction’s technical view matches this idea, receiving a Setup Rating of 7.
- Positive Trend Formation: Both the long-term and short-term trends for GVA are positive, a good sign for momentum investors. The stock is now trading close to its 52-week high, showing strength.
- Sideways Movement and Key Point: Lately, the stock has been trading inside a set range between about $98 and $110. This movement near highs can sometimes come before a new upward step. Importantly, the technical analysis notes a recent "Pocket Pivot" signal, which is a price and volume pattern implying buying by large investors.
- Defined Resistance and Support: The chart shows a clear resistance area just above the present price, near $111.05 to $111.29. A clear move above this point could mark the start of a new breakout stage. On the other hand, several support levels are seen below, including a main area near $104.64, which helps set the risk limits for a possible trade.
This technical arrangement, a good trend, recent movement near highs, and a defined resistance level to monitor, is typical of the patterns this combined filter tries to find. For a closer view of the chart activity, see the Granite Construction Technical Analysis report.
Why This Mix Is Significant
The connection between the fundamental and technical reports is what gives this method force. The good earnings growth and positive future forecasts give a fundamental reason for the stock's strength. They offer a logic that goes beyond simple chart patterns, suggesting the price movement could be backed by better business results. At the same time, the technical picture gives a possible time and place, noting a specific price point that, if crossed, could signal the start of the next upward step. This combination tries to separate stocks that are gaining on speculation from those where price movement may be verifying fundamental gain.
Finding Other Possibilities
Granite Construction shows an example of how mixing growth fundamentals with technical pictures can point out possible investment chances. For investors wanting to use this method to find other stocks with similar traits, the ready-made filter is available for more study.
You can find more results from the "Strong Growth Stocks with good Technical Setup Ratings" filter by following this link.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis is based on data and reports provided by third parties. Investing involves risk, including the potential loss of principal. Always conduct your own due diligence and consider consulting with a qualified financial advisor before making any investment decisions.
