Universal Display Corp (NASDAQ:OLED): A Strong Fundamental and Technical Setup

Combining technical and fundamental analysis can give investors a solid framework for finding good opportunities. The method focuses on finding companies with good underlying business growth, solid financial health, and profitability, which are then matched with positive chart patterns indicating a possible price breakout. This two-part method tries to find stocks that are not only sound in their fundamentals but also starting to get positive attention in the market. Universal Display Corp (NASDAQ:OLED) recently appeared in a screen made to find these kinds of opportunities, making it an interesting candidate for further review.

Strong Fundamental Backing

The foundation of this investment method is a good fundamental profile, and Universal Display Corp meets this need. The company’s fundamental analysis report shows a solid overall rating of 7 out of 10, with especially high scores in areas important for a growth stock.

• High Profitability and Health: The company gets a Profitability rating of 8 and a very high Financial Health rating of 9. Important positive points include:

  • A profit margin of 36.90%, doing better than 95% of its industry competitors.
  • Gross margins above 77%, showing strong pricing ability.
  • A very clean balance sheet with no debt and a high current ratio, indicating very good liquidity.

• Increasing Growth Path: The Growth rating of 7 is supported by good future expectations. While recent revenue decreased, the long-term pattern and, more significantly, the future estimates are positive.

  • Earnings Per Share (EPS) are predicted to increase by more than 20% each year in the next few years.
  • Revenue growth is expected to rise to 17.10%.

This fundamental quality is important for the method because it makes sure the company has the financial strength and earnings possibility to support a higher valuation, offering protection even if short-term price movements are unstable.

Technical Setup for a Possible Breakout

While the long-term fundamental story is important, the technical view gives the timing signal. Universal Display’s technical analysis report shows a neutral overall trend but points to a positive setup with a rating of 7 out of 10.

• Trading in a Range and Lower Volatility: The stock has been moving within a specific range over the last month, which frequently comes before a notable price change. This period of trading in a range helps establish a base of support.
• Important Resistance and Support Points:
  • A main resistance area is between $159.74 and $162.80. A clear move above this point could indicate the beginning of a new upward trend.
  • Good support is located near the $146.20 level, giving a sensible area for a stop-loss order to control risk.
• Positive Momentum Indicator: A recent "Pocket Pivot" signal has been observed, which is a volume-based sign suggesting buying by large investors. This matches the method’s aim of finding stocks that are starting to gain purchase interest.

The existence of a technical breakout pattern is the second part of the method's requirement. It indicates that the market is beginning to acknowledge the company's fundamental worth, possibly leading to a time of price increase.

Fit with Growth Investing Ideas

Universal Display Corp matches the standard profile of a growth stock as described in our introduction. The company works in the growing market for OLED technology, which is necessary for new displays in smartphones, televisions, and wearable devices. This big and increasing target market gives the scalability required for continued growth. The company’s large intellectual property collection and focus on R&D help it keep a competitive edge and market position. High profitability and financial health let it put earnings back into the business to support more expansion, a key feature of successful growth companies.

Looking for More Opportunities

For investors wanting to use this same structured method to find other possible opportunities, our stock screener is a useful tool. You can view the screen that found Universal Display Corp here, which looks for good growth, profitability, health, and positive technical setups.

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Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. All investments involve risk, including the possible loss of principal. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.