For investors looking to join solid fundamental growth with positive technical positioning, a multi-layered screening method can be especially effective. One such technique involves selecting for stocks that show forceful earnings momentum, are in a definite technical uptrend, and are resting in a pattern that hints at a possible breakout. This tactic seeks to find companies where speeding up business fundamentals are matching with helpful price action, possibly preparing for continued price gains. A screen that asks for a high ChartMill High Growth Momentum Rating (HGM), a forceful Technical Rating (TA), and a high Setup Quality Rating is made to find these chances.
PRIMORIS SERVICES CORP (NYSE:PRIM) appears as a candidate that fits these conditions, offering a case for examination by growth and momentum-oriented investors.
Fundamental Growth Momentum
Primoris Services, a specialty construction and infrastructure company, shows the sort of operational momentum that forms the base of the High Growth Momentum Rating. This proprietary rating combines multiple growth and earnings quality factors, and Primoris gets a 6, pointing to firm underlying fundamentals. The score is backed by several important metrics:
- Outstanding Earnings Growth: The company's trailing twelve-month (TTM) EPS has increased by about 66% year-over-year. Recent quarterly performance has been even more notable, with year-over-year EPS growth in the last four quarters recorded at 54%, 62%, 109%, and 64%, in that order.
- Forceful Revenue Increase: Top-line growth is solid, with TTM revenue up more than 21%. Quarterly sales growth has been steadily positive and speeding up, with the newest quarter showing a 32% rise compared to the same time last year.
- Positive Surprises and Revisions: Primoris has exceeded analyst EPS estimates in each of the last four quarters, with an average surprise of 45.2%. Also, analysts have been adjusting their estimates higher, with the average EPS estimate for the next fiscal year rising by more than 8% in the last three months, a signal of increasing confidence in the company's short-term outlook.
- Cash Flow Generation: A notable number is the free cash flow growth, which has jumped by over 537% in the past year. This shows the company's forceful earnings are turning into real cash, giving financial room to maneuver.
For the high growth momentum method, these factors are vital. They go past simple past growth to catch speeding up, positive surprises, and forward-looking analyst confidence, all signs of a company that may be picking up operational momentum.
Technical Strength and Setup Quality
While forceful fundamentals give the "why," technical analysis assists with the "when." According to the detailed ChartMill Technical Analysis report, Primoris shows excellent technical health, receiving a perfect Technical Rating of 10. The report points out a steady performance across all time frames, with both long-term and short-term trends graded as positive. The stock is doing better than 96% of the whole market and 90% of its peers in the Construction & Engineering industry, a clear mark of relative strength.
Maybe more important for timing an entry, the stock presently has a Setup Rating of 7. This signals the price action is forming a helpful consolidation pattern. After a notable rally over the past year, the stock has been trading in a set range, letting moving averages catch up and volatility decrease. The technical report notes lower volatility and the recent showing of a "Pocket Pivot" signal, which can point to accumulation. The analysis finds a clear resistance zone near $169.37, suggesting a possible breakout level, with set support areas below to help control risk.
This mix is exactly what the screening method looks for: a fundamentally forceful company (HGM Rating > 4) in a strong uptrend (TA Rating > 7) that is now pausing in a consolidation, giving a clear setup for a possible next move higher (Setup Rating > 7).
A Coming Together Chance
Primoris Services represents a case where fundamental and technical analyses are telling a matching story. The company is producing speeding up earnings and cash flow, surprising to the high side, and getting higher revisions from analysts. At the same time, its stock price shows this strength, trading near 52-week highs with better relative performance, and has now moved into a pattern that technical traders often watch for continuation moves.
For investors using a high-growth momentum tactic with attention on technical entries, such meetings are key areas for concentrated study. It is important to do complete due diligence, thinking about industry forces, the company's project backlog, and wider economic factors that affect the construction sector.
Interested in finding more stocks that match this high-growth momentum breakout profile? You can run the screen yourself using this High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis presented is based on data and tools provided by ChartMill and should not be the sole basis for any investment decision. All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always conduct your own research and consider your financial situation and risk tolerance before making any investment decisions.
