A common challenge for growth investors is identifying companies with solid fundamental prospects at a time when their stock charts indicate a possible upward move. One way to handle this is by joining thorough fundamental and technical study, looking for stocks that are not only increasing quickly and are financially stable but are also showing helpful price patterns. This method tries to match the basic business strength with good market timing, sorting for technical breakout patterns in stocks that display solid growth, firm profitability, and acceptable financial condition. The aim is to locate chances where better business fundamentals may be close to being seen and valued by the market.
Jabil Inc (NYSE:JBL) presents a notable example for this method. As a top global manufacturing solutions provider, Jabil works with a wide set of high-growth fields, including cloud and AI infrastructure, healthcare, automotive, and renewable energy. This places the company within several major long-term trends.
Fundamental Strength: The Engine for Growth
The base of this method depends on locating companies with better growth measures and the profitability to maintain them, which Jabil's fundamental analysis report confirms. The company receives a solid Growth Rating of 7/10 and a notable Profitability Rating of 8/10. This pairing is important; high growth is less significant if it is not becoming efficient returns for the business.
- Notable Earnings Path: Jabil has shown strong earnings growth, with EPS increasing 35.07% over the past year and at an average yearly rate of 27.52% over recent years. Future projections stay solid, with expected EPS growth of 17.69% each year.
- Better Profitability Measures: The company is effective in capital efficiency. Its Return on Equity (ROE) of 52.31% and Return on Invested Capital (ROIC) of 24.71% are with the top in its field, showing management is very good at creating profits from shareholder equity and invested capital.
- Acceptable Valuation Setting: Despite its solid performance, Jabil's valuation is not high compared to similar companies. Its Price-to-Earnings and Price-to-Forward-Earnings ratios are lower than a large portion of companies in the Electronic Equipment, Instruments & Components field. When growth is considered through the PEG ratio, the valuation seems acceptable, particularly given the high profitability.
While the report notes some points about short-term liquidity ratios, these are weighed against solid solvency measures, including a good Altman-Z score and a workable debt-to-free-cash-flow ratio. For a growth-centered method, the main factors—increasing revenue, fast earnings growth, and high profitability—are clearly there.
Technical Setup: The Chart Shows the Momentum
A solid fundamental story needs a confirming technical view to indicate the market is starting to act on it. Jabil's technical analysis report shows a stock in a solid uptrend with a helpful recent pattern, receiving a high Technical Rating of 9/10 and a Setup Rating of 7/10.
- Defined Uptrend Across All Timeframes: Both the long-term and short-term trends are positive, with the stock trading well above its important moving averages (20, 50, 100, and 200-day SMAs), which are all moving upward. This consistent alignment points to continued buying pressure.
- Pause Within a Positive Trend: The report finds that Jabil is now forming a bull flag pattern. This pattern usually appears after a solid price rise, marked by a small downward move or pause on lower volume. It is often seen as a break in the trend before a possible continuation of the earlier upward move.
- Trading Near Highs with Small Overhead Resistance: The stock is trading near its 52-week high, which is frequently a signal of strength. Importantly, the analysis states there is "very little resistance above the current price," indicating a clear way for more gain if the stock moves up from its current pause.
This technical position is exactly what the joined method looks for: a fundamentally solid company whose stock is not in a downtrend or weak state, but is instead resting in a high-level pause within a defined uptrend, pointing to a possible next step higher.
Why This Pairing Is Important
The link between these reports is what creates the case for Jabil significant. The fundamental analysis answers why the stock could move higher—because the business is growing earnings strongly and creating high returns on capital. The technical analysis suggests when this might be occurring—as the stock keeps major gains and forms in a known continuation pattern. This method reduces the chance of buying a good company whose stock is in a long decline or following a technical breakout in a company with poor or worsening fundamentals.
Finding Other Chances
Jabil was found through a screen made to locate exactly this kind of meeting between solid growth fundamentals and hopeful technical setups. For investors looking to use this approach to find other possible chances, you can view and change this "Strong Growth Stocks with good Technical Setup Ratings" screen here.
Disclaimer: This article is for information only and does not make up financial advice, a recommendation, or an offer or request to buy or sell any securities. The study shown is based on data and reports available at the time of writing. Investing includes risk, including the possible loss of principal. Always do your own study and think about talking with a qualified financial advisor before making any investment choices.
