MasTec Inc (NYSE:MTZ) has emerged as a standout candidate for investors employing a high growth momentum strategy, particularly those who combine strong earnings acceleration with favorable technical setups. The methodology used here screens for stocks that not only demonstrate strong earnings and sales momentum—a core tenet of the CANSLIM and Mark Minervini approaches—but also exhibit a clear technical breakout pattern. By filtering for a Setup Rating above 7, a Technical Analysis (TA) Rating above 7, and a High Growth Momentum (HGM) Rating above 4, this approach seeks to identify companies that are firing on all fundamental and technical cylinders. MasTec clears all these hurdles with room to spare, making it a strong case study for this strategy.
High Growth Momentum Fundamentals
The HGM Rating of 6 out of 10, while not perfect, signals that MasTec possesses many of the key traits high growth investors look for. The rating evaluates a blend of earnings and sales growth, acceleration, margin expansion, and analyst revisions. Here is how MasTec stacks up on the most critical metrics:
- Earnings Growth: The company has delivered stellar EPS growth. The trailing twelve months (TTM) EPS of $6.55 grew 67.9% over the last year. More importantly, the most recent quarter (Q2Q) showed 43.7% growth, and the next quarter is estimated to accelerate to 97.2% growth. This pattern of current and future acceleration is exactly what the HGM model rewards.
- Sales Growth: Revenue is growing steadily alongside earnings, with TTM revenue up 16.2% and the most recent quarter showing 15.8% growth. The next quarter is estimated to accelerate to 23.8% sales growth. This ensures that earnings are supported by real business expansion.
- Consistent Surprises: MasTec has beaten EPS estimates in all four of the last quarters, with an average beat of 16.7%. Revenue surprises have also been consistent, with four beats at an average of 3.2%. This track record of exceeding expectations confirms strong underlying operational momentum.
- Analyst Revisions: The percentage change in the average next year EPS estimate has risen by 4.3% over the last three months, while revenue estimates for next year have been revised upward by a substantial 10.0%. Positive revisions are a key driver of the momentum score, as they suggest the story is still improving.
Why are these metrics so crucial for the high growth momentum method? The strategy relies on identifying companies where earnings and sales are not just growing, but accelerating. The combination of double-digit EPS growth, impending acceleration in both earnings and sales, and a clean sweep of analyst estimate beats provides a strong fundamental tailwind. As the methodology notes, a score of 6 or higher is already quite good, and in MasTec’s case, the underlying drivers of that score are exceptionally strong.
Technical Strength and Setup Quality
While the fundamentals provide the “what” to buy, the technical analysis answers the “when” to buy. MasTec scores a perfect 10 out of 10 on the ChartMill Technical Rating, which places it in the top tier of all stocks for technical health.
- Trend Analysis: According to the technical report, both the long-term and short-term trends are positive. The stock is outperforming 97% of all stocks over the past year, and its gains have been steady rather than erratic. It currently trades near its 52-week high of $388.57, a clear sign of a strong uptrend. The stock is well above its key moving averages, which are all rising.
- Setup Quality: The Setup Rating of 7 out of 10 confirms the presence of a viable consolidation pattern. The report notes that prices have been trading in a fairly wide range of $299.52 to $388.56 recently, but the stock is currently near the top of that range. The setup’s quality is further enhanced by a recent Pocket Pivot signal—a price/volume accumulation pattern that indicates institutional buying. This pattern is a classic precursor to a breakout.
- The Trade Setup: The automated analysis suggests a potential entry point at $388.57 (just above the 10-day high) with a stop loss at $357.00. This provides a defined risk of 8.1%, which can be managed through proper position sizing.
Finding More Setups Like This
MasTec represents a confluence of strong earnings momentum and a favorable technical setup, which is exactly the sweet spot for this style of investing. The combination of a perfect TA score and a quality setup suggests the stock is in a strong uptrend and may be on the verge of its next leg higher.
Investors looking to replicate this screening process and find other similar opportunities can do so using the same criteria. You can access the full list of stocks that meet these demanding conditions—High Growth Momentum Rating above 6, Technical Rating above 7, and Setup Quality above 7—by running the High Growth Momentum Breakout Setups Screen on ChartMill. This screen automates the heavy lifting, delivering a new list of potential high-growth breakout candidates every day.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Trading stocks involves risk, and you should conduct your own research or consult a qualified financial advisor before making any investment decisions.