For investors looking to join solid earnings momentum with positive chart patterns, a multi-layered screening method can be very useful. One method focuses on finding stocks that rate well on three specific ChartMill scores: the High Growth Momentum (HGM) Rating, which finds companies with good short-term earnings speed; the Technical Rating, which assesses the general condition and direction of a stock; and the Setup Rating, which judges the condition of a present consolidation or base pattern. This combination seeks to locate high-growth companies that are both fundamentally speeding up and technically ready for a possible move higher, giving a measured entry point.
HECLA MINING CO (NYSE:HL) appears as a strong candidate from this kind of screen, showing notable force across both fundamental momentum and technical areas.
Fundamental Growth Momentum
The center of the high-growth momentum method is to find companies showing forceful and frequently speeding earnings and sales growth. Hecla Mining’s latest financial results put it firmly in this group, as seen in its notable HGM Rating of 9 out of 10. The supporting data shows a time of fast profitability increase.
- Fast Earnings Growth: The company's earnings per share (EPS) growth is remarkable. Year-over-year EPS growth for the trailing twelve months is at 360%. More notably, the growth rate has been speeding up each quarter, with the latest quarter showing a 450% rise compared to the same quarter last year.
- Growing Profitability: This earnings jump is backed by much wider profit margins. The profit margin has risen in sequence over the last four reported quarters, from about 11% to almost 30% in the most recent quarter. This shows the company is turning a much bigger part of its revenue into net income, a main signal of operational effectiveness and pricing strength.
- Solid Sales Base and Positive Revisions: Revenue growth is solid, with the last quarter up almost 80% year-over-year. Also, analysts have been actively increasing their estimates, with the average EPS estimate for the next year moved up by over 41% in the last three months. This mix of exceeding estimates and getting upward revisions is a trademark of positive earnings momentum.
Technical Force and Setup Condition
While fundamental momentum finds what to buy, technical analysis aids in deciding when. Hecla’s technical picture is notably strong, receiving a complete Technical Rating of 10. A detailed technical report notes the stock's place as a market leader.
- Long-Term Upward Trend in Place: The stock is in a confirmed long-term positive trend, trading much above its important moving averages (50-day, 100-day, and 200-day), all of which are climbing. Its relative strength is excellent, doing better than 98% of all stocks over the past year and 90% of its group in the Metals & Mining industry.
- Consolidation Shows a Setup: Even with its strong upward trend, the stock is not viewed as "stretched." It has been consolidating its recent advances, trading in a set range over the past month. This consolidation has led to a firm Setup Rating of 7, showing the creation of a possible base pattern. The analysis notes a clear resistance area just above the present price (around $24.91) and support below (near $23.51), giving a plan for a structured trade setup with specific entry and exit points.
Combination for the Momentum Investor
For a high-growth momentum investor, Hecla Mining offers a uncommon blend. The fundamental account is one of sharp earnings speed and margin growth, exactly what the HGM Rating is made to find. At the same time, the stock's technical position shows it is a market leader that has stopped to absorb its gains, giving a possible entry point within its continuing upward trend instead of after a steep jump. This matches the method's aim of entering strong stocks as they come out of useful pauses.
The method of joining high growth momentum with technical breakout setups is made to sort the market for chances like this. If you want to find other stocks that now fit these strict conditions of solid earnings momentum, technical condition, and a good setup pattern, you can review the live screen results here: View Current High Growth Momentum Breakout Setups.
Disclaimer: This article is for informational and example purposes only and is not meant as investment advice. The analysis is based on given data and does not form a suggestion to buy, sell, or hold any security. Investing includes risk, including the possible loss of principal. Always do your own complete research and think about your personal financial position and risk tolerance before making any investment choices.
