STERLING INFRASTRUCTURE INC (NASDAQ:STRL) Shows High Growth Momentum and Technical Strength

Investors using a high growth momentum strategy usually look for companies showing strong earnings acceleration, positive estimate revisions, and increasing profit margins, all while displaying good technical health and favorable chart patterns for entry. This method mixes fundamental growth traits with technical timing, trying to capture stocks during times of both fundamental momentum and technical breakout possibility. Sterling Infrastructure Inc (NASDAQ:STRL) recently appeared through a screen looking for securities with a High Growth Momentum Rating above 4, a Technical Rating above 7, and a Setup Rating above 7, indicating it deserves further examination from this investment viewpoint.

High Growth Momentum Fundamentals

Sterling Infrastructure shows several fundamental characteristics that are highly valued by growth momentum investors. The company's notable earnings power and positive momentum across important metrics add to its good rating.

• Exceptional EPS Growth: The company has shown strong earnings growth, with EPS (TTM) at $10.71, representing a year-over-year rise of more than 80%. Recent quarterly performance has been especially good, with the last quarter showing a 76.6% increase compared to the same quarter last year.
• Increasing Profitability: A key element for continued growth is increasing profit margins. STRL's profit margin in the last reported quarter was 11.55%, a marked gain from the 9.16% recorded in the previous quarter and a large rise from the 4.43% reported three years ago. This pattern points to better operational efficiency and pricing power.
• Positive Analyst Sentiment: The momentum is backed by Wall Street, as shown by a 10.4% upward revision in the average next-year EPS estimate over the past three months. Such revisions are frequently a forerunner to future performance and are a main part of the growth momentum model.
• Good Cash Flow Generation: The company's free cash flow per share (TTM) is a solid $14.20, having increased more than 51% in the last year. This offers financial room for more investment, acquisitions, or shareholder returns.

These elements, strong and speeding up earnings, increasing margins, and positive estimate revisions, are central to the high growth momentum method, as they indicate a company that is not just growing, but doing so at a quickening speed with bettering fundamentals.

Technical Strength and Market Position

From a technical viewpoint, Sterling Infrastructure is in a strong position. The stock has been given a perfect Technical Rating of 10 out of 10 by ChartMill, showing very good health across multiple timeframes. This rating is important for momentum investors as it confirms that the strong fundamental story is being shown in the stock's price action.

• Strong Uptrends: Both the short-term and long-term trends are decidedly positive, a typical feature of a market leader.
• Excellent Relative Strength: STRL is doing better than 95% of all stocks in the market over the past year and 96% of its peers in the Construction & Engineering industry. This superior relative strength is a sign of stocks set for continued success.
• Price Near Highs: The stock is now trading near its 52-week high, which, when paired with its high relative strength, is an indication of continued demand and momentum.

A detailed breakdown of the technical picture, including support and resistance levels, can be found in the full ChartMill Technical Report for STRL.

Quality Setup for Entry

While a strong trend is important, a clear entry point is key for handling risk. STRL presents an interesting setup with a Setup Rating of 7. The analysis shows that prices have been consolidating lately after a good advance, forming a base that might come before its next move higher.

The technical report finds a defined support zone below the current price, providing a sensible level for placing a protective stop-loss order. Also, a recent "Pocket Pivot" signal, a price increase on higher-than-normal volume, was seen, often pointing to accumulation by institutional investors. For momentum investors, this mix of a strong underlying trend, a time of consolidation, and a defined support level creates a possibly favorable risk/reward situation for entry.

Discovering Similar Opportunities

Sterling Infrastructure acts as a good example of a stock that fits with a disciplined high growth momentum and technical breakout plan. For investors interested in finding other companies that meet similar strict criteria of strong growth fundamentals, technical health, and timely chart setups, more research is strongly suggested.

You can actively screen for such opportunities using the predefined High Growth Momentum Breakout Setups Screen, which is made to find a new list of possible candidates each day.

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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 information presented should not be used as the sole basis for making any investment decision. Always conduct your own due diligence and consult with a qualified financial advisor before making any investment.