A basic method for investing often looks at a company's financial condition and possibilities for expansion, while chart-based study tries to find good times to buy or sell based on price movements and investor sentiment. A plan that combines these two areas tries to locate companies with good business progress that are also showing positive price behavior, which may indicate a coming rise. This approach looks for stocks showing solid basic expansion, along with acceptable earnings and financial soundness, while also displaying a positive chart formation that points to less price swings and a potential move higher.
Moelis & Company - Class A (NYSE:MC) is an independent global investment bank that gives advice on mergers, acquisitions, restructurings, and capital markets transactions. The firm's results are linked to the amount of corporate deal activity, making it a business that follows economic cycles and can show notable expansion during busy markets.
Basic Expansion Profile
The center of this investment plan starts with finding companies with better expansion paths. According to the basic analysis report for Moelis & Co, the company gets a high Expansion Rating of 8 out of 10. This score comes from strong recent results and positive future estimates.
- Strong Recent Expansion: The company's revenue grew by 51.19% over the last year, while earnings per share (EPS) had a large increase of 439.29%. This shows not just revenue growth but also notable operating efficiency and earnings on that expansion.
- Positive Forward Estimates: Analysts forecast continued solid expansion, with expected yearly EPS growth of 33.15% and revenue growth of 22.40% in the next years. The report states that this is a rise from the company's past expansion rate, a good signal for investors focused on momentum.
- Price Consideration in Context: While the stock's Price-to-Earnings (P/E) ratio of 23.73 seems high alone, the analysis indicates it is priced more favorably than the wider industry average. More significantly, when expansion is considered through the PEG ratio, the price looks more acceptable, offering a balance for the high expected earnings growth.
Supporting Basics: Earnings and Soundness
Strong expansion needs to be backed by a capable business. This plan needs "acceptable" ratings in earnings and financial soundness to make sure the growth can continue and is not on weak footing. Moelis & Co gets an Earnings Rating of 5 and a Financial Soundness Rating of 5.
- Earnings Strengths: The company does very well in returns on capital. Its Return on Equity (ROE) of 43.84% and Return on Invested Capital (ROIC) of 23.27% are some of the best in the capital markets industry, doing better than over 97% of similar companies. This shows very efficient use of shareholder capital.
- Soundness Points: The company has a clean balance sheet with no debt, a major positive for stability. However, this is balanced by weaker near-term cash flow measures, with current and quick ratios below 1.0, showing possible difficulty in meeting immediate needs without future cash income, a typical feature in service-based firms like investment banks.
Chart Formation for a Potential Rise
The basic story is matched by the chart view. The chart-based analysis report gives Moelis & Co a Formation Rating of 8 out of 10, which is made to find interesting price patterns.
- Narrow Trading and Less Swings: The report states that the stock has been moving in a set area over the last month ($68.57 - $78.22) and is now placed in the middle of this area. This time of narrow trading often comes before a notable price change.
- Important Support and Barrier: A main barrier area is found between $77.01 and $78.80. A continued move above this area could signal the beginning of a new upward phase, confirming the basic expansion idea with price behavior.
- Direction Alignment: The longer-term direction for MC stays positive, while the shorter-term direction is neutral. This suggests the stock is pausing inside a larger upward direction, which fits with the "acceptable formation" idea of a potential continuing pattern.
Plan Fit and Possibility
This joined study shows why Moelis & Co matches the "Strong Expansion Stocks with good Chart Formation" filter. The company shows the needed basic points: outstanding and speeding expansion backed by high returns on capital. At the same time, the chart shows the stock is in a narrow range after a recent gain, gathering pressure near an important barrier level. For investors using this two-part plan, this presents a situation where strong business progress may be close to being seen by the market through a chart-based rise.
Interested in finding more stocks that match this expansion-and-formation profile? You can use the same filter with our stock screening tool.
Disclaimer: This article is for information only and does not make up financial guidance, a support, or a suggestion to buy, sell, or hold any security. Investing has risk, including the possible loss of the amount invested. Always do your own complete study and think about your personal financial position and risk comfort before making any investment choices.
