For investors looking to join fundamental growth momentum with timely technical entry points, a multi-factor screening method can be a useful tool. This process looks for companies showing solid underlying business speed, shown by increasing earnings, sales growth, and positive analyst changes, while also displaying constructive price action that indicates a possible move out of a consolidation period. By selecting for a high ChartMill High Growth Momentum Rating (HGM), a solid Technical Rating (TA), and a high Setup Quality Rating, the method tries to find stocks where getting better fundamentals are meeting with a technically favorable time to consider a position.
RENASANT CORP (NYSE:RNST) appears from such a screen, presenting a profile that deserves more attention from growth-focused investors. The bank holding company, which works throughout the Southeast, shows signals of speeding up financial performance within a sector not usually known for fast growth.
Fundamental Growth Momentum
The center of the high-growth momentum method is finding companies with speeding up business trends. Renasant's recent financial data shows several positive signals that add to its HGM Rating of 6.
- Earnings Speed Increase: The most recent quarter showed a large year-over-year EPS growth of 24.66%, a noticeable speed increase from the 10.0% and 0.0% growth seen in the two earlier quarters. This pattern of re-acceleration is a main sign for momentum investors.
- Solid Sales Growth: Top-line growth has been even more notable, with revenue rising 66.68% in the last quarter. This comes after strong growth of 22.36% and 63.13% in the earlier periods, pointing to continued business expansion.
- Analyst Confidence: Forward estimates are moving higher, a key part of the HGM Rating. Analyst changes for next year's EPS have increased by 2.51% over the last three months, suggesting building positive feeling about the company's near-term profit path.
- Cash Flow Strength: Free cash flow per share has grown by a large 82.45% over the past year, giving fundamental support for the earnings growth and pointing to efficient capital management.
While the yearly EPS growth is more moderate and profit margins have seen some quarterly change, common in the banking industry due to provision for credit losses, the clear quarter-over-quarter speed increase in earnings and continued high sales growth form a notable momentum story.
Technical Strength and Setup Quality
A solid fundamental story is most effective when joined by a favorable chart structure. According to the detailed ChartMill Technical Report, RNST shows both the health and the setup that technical traders search for.
Technical Health (TA Rating: 7) The stock's Technical Rating of 7 shows a solid uptrend. Key positives from the report include:
- Both the long-term and short-term trends are rated as positive.
- The stock is trading in the upper part of its 52-week range, showing relative strength, especially as the wider S&P 500 trades in the lower part of its own range.
- The price is above key rising moving averages (20-day, 50-day, and 200-day SMA), confirming the bullish structure.
Breakout Setup (Setup Rating: 9) Maybe more notable for timing is the high Setup Rating of 9. This points out the stock is consolidating in a tight range after its rise, which can often come before a new move higher. The technical report states:
- Prices have been consolidating between about $35.14 and $38.99 over the last month, with change decreasing, a classic setup trait.
- A clear resistance zone exists between $38.88 and $39.78. A clear break above this zone could signal a textbook breakout.
- Multiple support levels are found below, with a main zone from $36.00 to $36.91, giving a logical area for a protective stop-loss order.
- A recent "Pocket Pivot" signal, a volume-based accumulation pattern, adds more positive confirmation to the setup.
This combination, a stock in a clear uptrend (TA 7) that has paused to build a tight consolidation (Setup 9), creates a defined, lower-risk situation for entry if the breakout above resistance happens.
Conclusion
Renasant Corp represents an interesting case where traditional sector lines are blurred by momentum traits. The company is showing quarter-over-quarter speed increase in key growth measures, supported by rising analyst estimates and solid cash flow creation. Importantly, this fundamental gain is reflected in the stock's technical position, which shows both trend strength and a high-quality consolidation pattern ready for a possible breakout. For investors using a high-growth momentum method, RNST offers a meeting of fundamental and technical factors that match the method's central ideas: search for speeding up growth, and enter when the price structure gives a clear and defined risk point.
Find More Possible Setups The screen that found RNST is made to find similar chances where growth momentum meets technical readiness. You can view the current list of qualifying stocks by going to the High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for informational purposes only and does not form investment advice, a suggestion, or an offer or request to buy or sell any securities. The analysis presented is based on data given and should not be the only base for any investment decision. Always do your own due diligence and think about talking with a qualified financial advisor before making any investment. Past performance is not a sign of future results.
