In the search for good investment chances, a method that joins solid fundamental momentum with good technical health can be especially effective. This process looks for stocks that show signs of high growth, such as speeding up earnings and sales, while also showing helpful price action that points to a possible breakout. One filter looks for securities with a ChartMill High Growth Momentum (HGM) Rating above 4, pointing to good earnings momentum, together with a Technical (TA) Rating and Setup Rating both above 7, which show a good uptrend and a price pattern getting ready for a new move up. This combination tries to find companies where fundamental health is being supported by the market's technical action.
A security that recently came from this screening process is JANUS HENDERSON GROUP PLC (NYSE:JHG), a global active asset manager. The company makes a strong case for investors using a high-growth momentum plan, backed by both its business results and its stock's technical position.
Fundamental Growth Momentum
The center of the high-growth momentum plan is finding companies with speeding up business fundamentals. Janus Henderson's recent financial numbers show several important traits that add to its HGM Rating of 6.
- Very Good Recent Earnings Growth: The latest quarter showed a year-over-year EPS jump of 87.85%, a large increase from the 19.78% and 5.88% growth seen in the two earlier quarters. This kind of quarterly speed is a main reason for momentum investors.
- Good Annual Profit Growth: Over the last reported full year, the company's earnings per share grew by 35.31%. Also, its profit margin grew a lot to 26.91% from 16.13% the year before, pointing to better efficiency.
- Steady Earnings Surprises: A history of beating analyst estimates builds trust. JHG has beaten EPS estimates in each of the last four quarters, with an average surprise of 23.70%.
- Positive Estimate Changes: Analyst opinion is a key forward-looking sign. Over the past three months, the average EPS estimate for the next fiscal year has been moved up by 1.8%, pointing to more confidence in the company's near-term future.
These things together show a company in a strong period of earnings growth and positive speed, which is exactly what the HGM rating is made to find.
Technical Health and Setup Quality
While fundamental momentum finds the "what" to buy, technical analysis helps with the "when." According to the detailed ChartMill technical report, JHG does very well here, having a perfect TA Rating of 10 and a high Setup Rating of 8.
- Good Uptrend: The report states that both the long-term and short-term trends for JHG are positive. The stock is trading near its 52-week high and does better than 91% of its peers in the Capital Markets industry. Its relative strength rating of 86.41 shows it is doing much better than the wider market, an important trait for leaders.
- Sound Consolidation: After a good upward move, the stock has entered a period of consolidation, trading in a tight range over the past month. This break lets the stock absorb its gains and form a new base for a possible next move up. The high Setup Rating of 8 shows this helpful pause, stating "reduced volatility while prices have been consolidating."
- Clear Risk Limits: The technical analysis finds a well-marked support zone between $49.66 and $51.31, giving a logical area for a stop-loss order if the expected breakout does not happen. This allows for careful risk management.
The mix of a perfect technical health score and a high-quality setup pattern suggests the stock is not only in a good uptrend but is also giving a possible entry point with a good risk/reward balance.
Conclusion
JANUS HENDERSON GROUP PLC shows the kind of chance looked for by a joined growth and momentum screen. The company is showing strong fundamental speed in earnings and profit, meeting the main needs for high-growth momentum investing. At the same time, its stock chart mirrors this health, showing market leadership through a clear uptrend and now resting in a consolidation that suggests a coming breakout. This match of getting better business results and helpful technical action is what investors using this process try to find.
For investors wanting to find other securities that meet these strict needs of high growth momentum paired with good technical breakout setups, more study can be done using the dedicated High Growth Momentum Breakout Setups screen.
Disclaimer: This article is for information only and does not make up financial advice, a suggestion, or an offer or request to buy or sell any securities. The information given is based on data supplied and should not be the only reason for any investment choice. Investing has 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.