Moelis & Co (NYSE:MC): A Growth and Momentum Play as Technical Breakout Looms

For investors aiming to achieve notable capital gains, a mixed method of fundamental and technical analysis can be an effective plan. The aim is to find companies with solid basic business expansion—firm and quickening revenue and profits—while also determining a good time for purchase based on price movement. This process sorts for stocks displaying "firm growth" basics, like high marks in growth, profitability, and financial soundness, and then adds a technical view to locate those displaying positive chart formations, such as moves upward from a period of limited movement, indicating a possible extension of the upward price move.

One stock presently fitting this two-part test is Moelis & Company - Class A (NYSE:MC). As a worldwide independent investment bank, the firm's results are closely linked to activity in mergers & acquisitions, restructurings, and capital markets. When corporate deal activity is good, firms like Moelis can display very fast expansion.

Fundamental Growth Driver

The central attraction of Moelis & Company is found in its positive growth outline, which is a main sorter in the scanning plan. A look at the company's fundamental analysis report shows a notable Growth Rating of 8 out of 10. This number is fueled by strong recent results and hopeful future estimates.

• Very Fast Recent EPS Growth: The company's Earnings Per Share jumped by 439.29% over the previous year, a clear mark of strong operational effect during a busy advisory time.
• Firm Revenue Momentum: Revenue increased by 51.19% in the last year, with a firm average yearly growth rate of 9.86% over recent years.
• Quickening Outlook: Importantly, the growth path is predicted to quicken. Analysts estimate average yearly EPS growth of 32.94% and Revenue growth of 22.09% for the next years. This quickening is a key qualitative feature of a genuine growth stock, showing widening market chances or rising efficiency.

Beyond only growth, the scan needs "acceptable profitability and soundness." Moelis gets a 5 in both Profitability and Financial Soundness. The profitability score is supported by very good returns on assets, equity, and invested capital, which all place in the high group of its Capital Markets industry. The soundness rating is a combination: the company has no debt—a big plus for stability—but displays less strong short-term cash ratios. This combined view indicates a firm that is operationally very good and financially steady over the long term, but investors should note its working capital setup.

Technical Picture and Breakout Chance

Finding firm growth is only part of the task; buying at a technically favorable time is the other. The technical analysis report for MC gives a firm Setup Rating of 7, pointing out a positive chart arrangement.

• Limited Movement and Breakout: The report states that prices have been in a period of limited movement lately, with price swings narrowing. The stock is testing an important resistance zone near $70.41. A clear move above this point could mark a breakout from this phase of limited movement.
• Supporting Price Directions: Both the short-term and long-term price directions for MC are now rated as positive, giving a good setting for a possible breakout move.
• Pocket Pivot Signal: A significant technical event mentioned is a recent "Pocket Pivot" signal, which is a price increase on larger trading volume than any down volume day in the previous two weeks. This is often seen by technical analysts as a mark of institutional buying without too much price excitement.

This technical view is exactly what the combined scanning plan looks for: a basically strong company that is also forming a positive price formation, indicating gathering speed that might come before a major price change.

Valuation Setting

For a growth stock, valuation is often less important than speed, but it gives useful setting. Moelis's Valuation Rating is a neutral 4. Its Price-to-Earnings ratio is somewhat high compared to its industry group but trades similarly to the wider S&P 500. However, when growth is considered through the PEG ratio, the valuation seems more acceptable, paying investors for the high predicted earnings growth. This matches a common growth investing idea: paying a higher price for better future enlargement.

A Plan in Use

The example of Moelis & Company shows the real-world use of a growth-with-speed plan. The strict basic filters make sure the company is not only a speculative idea but one with confirmed, quickening financial results. The technical filters then help find a possible turning point where market view may be matching this basic fact, trying to buy before a major price rise completely happens.

This particular stock was found using a set "Strong Growth Stocks with good Technical Setup Ratings" scan. You can examine the present market for more companies that match this mixed growth and speed description by viewing the live scan results here.

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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 presented is based on data and reports available at the time of writing. Investing involves risk, including the potential loss of principal. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.