A common challenge for growth-oriented investors is finding companies that show strong fundamental momentum and are also set for a possible technical breakout. This combined approach seeks to capture stocks where faster earnings and sales are meeting a positive price pattern, indicating the chance for a notable upward move. One way to find these chances involves filtering for stocks that rate well across three specific metrics: the High Growth Momentum (HGM) Rating, which measures short-term earnings and sales momentum; the Technical (TA) Rating, which judges the general condition and direction of a stock; and the Setup Rating, which examines the state of a current consolidation pattern. A stock that rates well in all three areas may present a notable combination of fundamental and technical health.
Hamilton Insurance Group Ltd. (NYSE:HG), a provider of insurance and reinsurance services, recently appeared from such a multi-factor filter. The company’s profile shows it works through three primary segments: Hamilton Re, Hamilton Global Specialty, and Hamilton Select, providing a varied portfolio in the insurance sector. The filter looked for securities with a High Growth Momentum Rating above 4, a TA Rating above 7, and a Setup Rating above 7, standards made to select for companies with positive earnings momentum, good technical trends, and a favorable price setup. HG’s presence on this list calls for a more detailed examination of the specific measures behind its scores.
High Growth Momentum Fundamentals
The center of the High Growth Momentum strategy is finding companies with speeding business performance, and HG’s recent financial data shows several notable trends. The HGM Rating combines different growth and momentum factors, and HG’s score of 6 points to a good fundamental setting for a growth investor.
- Notable Earnings Growth: The most prominent number is the quarterly earnings growth. Comparing the last reported quarter to the same quarter a year before, HG reported an EPS growth of 428.1%. While this is partly from a lower starting point, the prior quarter also showed solid year-over-year growth of 78.4%. This shows strong short-term earnings momentum, a main part of the HGM Rating.
- Good Annual Growth and Profitability Improvement: Looking over a longer period, earnings per share over the trailing twelve months (TTM) increased by 53.0%. Also, the company’s profit margin in the last quarter was 20.7%, showing a marked improvement from the 5.7% margin reported three quarters ago. A growing profit margin is a key signal of better operational efficiency and pricing ability, which is directly considered in the HGM score.
- Positive Surprises and Revisions: HG has exceeded EPS estimates in three of the last four quarters, with an average surprise of 626.1%, and has surpassed revenue estimates in all of the last four quarters. In addition, analysts have raised their average EPS estimate for the next year by 23.6% over the last three months. These positive surprises and upward revisions are direct parts of the HGM Rating, signaling that the company is regularly beating expectations and that Wall Street is growing more positive about its near-term outlook.
Technical Health and Market Position
While fundamentals give the "why," technical analysis aids with the "when." According to the detailed ChartMill Technical Report, HG displays excellent technical condition, which is important for the strategy as it looks for stocks already in clear uptrends and showing market strength.
The report gives HG a complete Technical Rating of 10 out of 10. This highest score comes from several points:
- Both its short-term and long-term trends are rated as positive.
- The stock is doing better than 88% of all stocks in the market and a strong 97% of its peers in the Insurance industry.
- It is currently trading at a new 52-week high, a typical sign of health.
- The stock is trading above all its main moving averages (20, 50, 100, and 200-day), which are all in upward arrangements.
This mix confirms that HG is not only a fundamentally sound company but also a market leader from a price performance view, a required part for momentum-based strategies.
Examining the Setup for a Possible Entry
A high Technical Rating by itself does not always offer a low-risk entry point; a stock can be stretched. This is where the Setup Rating becomes important. HG’s Setup Rating of 7 indicates a reasonable, though not ideal, consolidation pattern has developed. The technical report states that price action has been "a little bit too volatile to find a nice entry and exit point," proposing that investors could "wait for a consolidation first."
However, the report does describe a possible trade setup based on the present structure, suggesting an entry point just above the recent 10-day high at $31.86, with a stop loss set below a nearby support area around $29.84. This shows how the filter finds stocks where a clear technical structure exists, letting traders specify their risk exactly, a key part of orderly trading. The setup signals that while the stock is healthy, it may need patience for a more polished pattern to form or for a clear breakout above the noted level to confirm a new upward phase.
A Merging Chance
Hamilton Insurance Group Ltd. presents a situation where fundamental momentum and technical health are coming together. Its high scores on earnings growth, margin improvement, and analyst revisions confirm its spot in a high-growth momentum filter. At the same time, its faultless technical rating and specified, if somewhat unstable, setup pattern mark it as a market leader offering a possible breakout chance. For investors using a strategy that joins strong earnings acceleration with technical breakouts, HG represents the kind of merged signal these filters are built to find.
This review of HG came from a specific filter. Investors curious about finding other stocks that currently fit these standards of strong High Growth Momentum, high Technical Ratings, and good Setup patterns can view the current results through this High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. The analysis is based on data provided and should not be the sole basis for an investment decision. All 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.
