For investors looking to join solid earnings momentum with positive chart patterns, a plan centered on high-growth momentum stocks in technical breakout formations can be an interesting approach. This method uses two main proprietary measures from ChartMill: the High Growth Momentum (HGM) Rating, which looks at short-term earnings strength, speed of increase, and analyst views, and the Technical and Setup Ratings, which examine the stock's price direction and pattern quality. The aim is to find firms that are not only seeing fundamental improvement but are also set up on the chart for a possible extension of their upward move. MASTEC INC (NYSE:MTZ) comes from a scan using this idea, presenting a profile that justifies more attention from growth-focused investors.
Fundamental Growth Momentum
MasTec’s fundamental picture matches well with the needs of high-growth momentum plans. The company’s earnings show notable speed and strength, which are main parts of the HGM Rating.
- Strong Earnings Growth: The company has shown impressive year-over-year earnings per share (EPS) growth. Trailing twelve-month (TTM) EPS increased almost 90%, while the latest quarter had EPS rise over 52% against the same time last year.
- Clear Speed Increase: Possibly more critical for momentum investors, the growth rate has been getting faster in sequence. Reviewing past quarters, the year-over-year EPS growth has moved from 118% to 492%, then to 55%, and ended at a still-solid 52% in the most recent quarter. This sequence of high, increasing growth is a main signal the HGM Rating identifies.
- Steady Performance: MasTec has exceeded analyst EPS forecasts in all of the past four quarters, with an average beat of over 19%. Also, analysts have increased their future estimates, with the average next-year EPS estimate moved up by more than 2% in the past three months, a sign of belief in the continuing momentum.
- Widening Profit Margins: Backing the earnings growth is a clear improvement in profitability. The company's profit margin in the last reported quarter was about 4.05%, a meaningful gain from 2.42% the quarter before and 0.35% two quarters prior. Growing margins point to better operations and pricing ability, which are good signs for lasting growth.
These points together give MasTec an HGM Rating of 6. While not the highest possible, this good score indicates a company in a strong earnings rise, meeting the central fundamental need for this investment method.
Technical Strength and Pattern Quality
A good fundamental story is most effective when paired with a positive price chart. According to ChartMill’s detailed technical report, MasTec does well here too, having a perfect Technical Rating of 10 and a good Setup Rating of 8.
- Strong Upward Move: The technical study confirms MasTec is in a solid positive phase. Both its long-term and short-term directions are seen as good. The stock is priced above all its important moving averages (20, 50, 100, and 200-day), which are all moving up, a typical sign of continued buying interest.
- Outperforming the Market: With a relative strength percentile of 91, MTZ is doing better than most of the wider market. It is also priced close to its 52-week high, showing strength compared to its own past.
- Constructive Pattern: The Setup Rating of 8 shows the stock is making a positive formation. The report mentions "reduced volatility while prices have been moving sideways in the latest period." This suggests the stock is pausing within its upward move, possibly gathering force for its next step higher. These pause phases are exactly what technical traders search for to find entry points with clearer risk.
- Clear Risk Points: The technical study finds several support areas below the current price, with the closest important support near $212.60. This gives a defined plan for handling risk, as a move below this point could indicate a shift in the short-term picture.
A Combined Chance
MasTec shows a situation where fundamental momentum and technical position come together. The company’s rising and speeding earnings meet the "high growth momentum" need, giving the fundamental push for the stock’s climb. At the same time, its excellent technical rating confirms the market sees this strength, and its good setup score indicates the climb might be ready to resume from an organized chart formation.
This combination is the core of the joined scan: it tries to find companies that have both the earnings strength and the chart formation that often comes before more price gains. It tries to find stocks not only after a big breakout, but as they hold gains and get set for their next upward phase.
Find Other Possible Formations
The method that pointed out MasTec can be used regularly to find other possible chances. For investors wanting to see the present list of stocks that fit these joined needs of solid growth momentum and positive technical formations, you can review the set scan here: High Growth Momentum Breakout Setups.
Disclaimer: This article is for information only and is not investment advice, a suggestion, or an offer to buy or sell any security. The study uses given data and should not be the only reason for an investment choice. Always do your own research and think about talking with a qualified financial advisor before any investment. Past results do not guarantee future outcomes.
