The screen we ran for this article seeks stocks that combine strong earnings momentum with a well-defined technical pattern. The goal is to identify companies that not only have accelerating profits and sales—the core of high growth momentum investing—but are also showing the kind of price consolidation that often precedes a breakout. We filtered for stocks with a ChartMill Setup Rating above 7, a Technical Rating (TA) above 7, and a High Growth Momentum (HGM) Rating above 4. Texas Capital Bancshares Inc (NASDAQ:TCBI) scores strongly across the board, making it a candidate that high growth momentum investors should look at closely.
Fundamentals and Growth Momentum
The high growth momentum strategy revolves around identifying companies where earnings and sales are not just growing, but accelerating. It also rewards companies that consistently beat estimates and see analysts raise their forecasts. Texas Capital Bancshares checks nearly every box for this approach.
- Earnings per Share (TTM): $7.44
- EPS Growth (1Y TTM): 55.97%
- EPS Growth (Q2Q most recent): 69.57%
- EPS Estimate Beats (last 4 quarters): 4 out of 4
- Average EPS Beat Percentage: 16.94%
- Revenue Growth (1Y TTM): 35.84%
The earnings acceleration is particularly noteworthy. The company posted quarterly EPS growth of 97.5% (Q-3), 34.57% (Q-2), 48.25% (Q-1), and then 69.57% in the most recent quarter. This kind of acceleration is exactly what the HGM Rating rewards. The company has also beaten EPS estimates by an average of nearly 17% over the last four quarters, signaling consistent operational outperformance.
On the sales side, revenue growth is solid at 35.84% year-over-year for the trailing twelve months. The company also shows strong free cash flow generation, with FCF per share at $9.98 and positive year-over-year growth. The profit margin for the most recent year stands at 24.92%, a massive improvement from just 6.46% the prior year, demonstrating strong operating leverage.
The High Growth Momentum Rating of 6 out of 10 reflects these positive drivers. While a perfect 10 is rare, a 6 suggests the company exhibits many of the key characteristics that high growth momentum investors seek, particularly in terms of earnings acceleration and positive surprises. The company has also seen a 0.92% upward revision to next year's EPS estimates over the last three months, adding to the bullish fundamental picture.
Technical Strength and Setup Quality
Strong fundamentals are only half the equation. High growth momentum investors also need a stock with a solid technical structure and a favorable entry point. Texas Capital Bancshares performs well here as well.
The stock scores a 9 out of 10 on the ChartMill Technical Rating, placing it among the top technically sound stocks in the market. Key technical positives include:
- Positive long-term and short-term trends: Both timeframes are in confirmed uptrends, a crucial alignment for any growth trade.
- Strong relative strength: The stock has outperformed 74% of all stocks over the past year, a sign of institutional demand.
- Price position: TCBI is trading near the upper end of its 52-week range, which is consistent with a stock in a strong uptrend.
The Setup Rating of 7 out of 10 indicates that a tradable consolidation pattern is forming. According to the technical report, a resistance zone sits just above the current price between $105.02 and $105.98. A decisive move above this area could trigger a breakout. The stock is currently trading around $103.40, with a defined support zone between $98.54 and $101.27. This setup provides a clear risk/reward framework for a potential entry, which is exactly what the screen aims to find.
While the broader S&P500 shows a negative long-term trend, the short-term market trend is positive. For a stock like TCBI that has built a strong independent uptrend and is showing a consolidation pattern, this market backdrop can be a tailwind for a breakout if the broader market's short-term momentum continues.
Analyst Views
The earnings and sales beat track record already suggests analysts may have been too conservative. The fact that estimates for next year are being revised higher, even modestly, adds further confidence. Currently, analyst estimates point to 21.15% EPS growth in the next quarter compared to the same quarter last year. While this represents a deceleration from recent eye-catching numbers, it still indicates strong continued profitability.
Finding More Setups
This combination of strong fundamental momentum and a high-quality technical pattern is rare. The screen we used filters specifically for stocks that meet these demanding criteria. To explore other stocks that are currently showing similar high growth momentum characteristics with technical breakout patterns, visit the High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks involves risk. Always conduct your own analysis before making any investment decisions.
Read full article here »
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Texas Capital Bancshares Inc (NASDAQ:TCBI) Shows Strong Growth Momentum and Bullish Technical Setup
The screen we ran for this article seeks stocks that combine strong earnings momentum with a well-defined technical pattern. The goal is to identify companies that not only have accelerating profits and sales—the core of high growth momentum investing—but are also showing the kind of price consolidation that often precedes a breakout. We filtered for stocks with a ChartMill Setup Rating above 7, a Technical Rating (TA) above 7, and a High Growth Momentum (HGM) Rating above 4. Texas Capital Bancshares Inc (NASDAQ:TCBI) scores strongly across the board, making it a candidate that high growth momentum investors should look at closely.
Fundamentals and Growth Momentum
The high growth momentum strategy revolves around identifying companies where earnings and sales are not just growing, but accelerating. It also rewards companies that consistently beat estimates and see analysts raise their forecasts. Texas Capital Bancshares checks nearly every box for this approach.
The earnings acceleration is particularly noteworthy. The company posted quarterly EPS growth of 97.5% (Q-3), 34.57% (Q-2), 48.25% (Q-1), and then 69.57% in the most recent quarter. This kind of acceleration is exactly what the HGM Rating rewards. The company has also beaten EPS estimates by an average of nearly 17% over the last four quarters, signaling consistent operational outperformance.
On the sales side, revenue growth is solid at 35.84% year-over-year for the trailing twelve months. The company also shows strong free cash flow generation, with FCF per share at $9.98 and positive year-over-year growth. The profit margin for the most recent year stands at 24.92%, a massive improvement from just 6.46% the prior year, demonstrating strong operating leverage.
The High Growth Momentum Rating of 6 out of 10 reflects these positive drivers. While a perfect 10 is rare, a 6 suggests the company exhibits many of the key characteristics that high growth momentum investors seek, particularly in terms of earnings acceleration and positive surprises. The company has also seen a 0.92% upward revision to next year's EPS estimates over the last three months, adding to the bullish fundamental picture.
Technical Strength and Setup Quality
Strong fundamentals are only half the equation. High growth momentum investors also need a stock with a solid technical structure and a favorable entry point. Texas Capital Bancshares performs well here as well.
The stock scores a 9 out of 10 on the ChartMill Technical Rating, placing it among the top technically sound stocks in the market. Key technical positives include:
The Setup Rating of 7 out of 10 indicates that a tradable consolidation pattern is forming. According to the technical report, a resistance zone sits just above the current price between $105.02 and $105.98. A decisive move above this area could trigger a breakout. The stock is currently trading around $103.40, with a defined support zone between $98.54 and $101.27. This setup provides a clear risk/reward framework for a potential entry, which is exactly what the screen aims to find.
While the broader S&P500 shows a negative long-term trend, the short-term market trend is positive. For a stock like TCBI that has built a strong independent uptrend and is showing a consolidation pattern, this market backdrop can be a tailwind for a breakout if the broader market's short-term momentum continues.
Analyst Views
The earnings and sales beat track record already suggests analysts may have been too conservative. The fact that estimates for next year are being revised higher, even modestly, adds further confidence. Currently, analyst estimates point to 21.15% EPS growth in the next quarter compared to the same quarter last year. While this represents a deceleration from recent eye-catching numbers, it still indicates strong continued profitability.
Finding More Setups
This combination of strong fundamental momentum and a high-quality technical pattern is rare. The screen we used filters specifically for stocks that meet these demanding criteria. To explore other stocks that are currently showing similar high growth momentum characteristics with technical breakout patterns, visit the High Growth Momentum Breakout Setups Screen.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks involves risk. Always conduct your own analysis before making any investment decisions.
Read full article here »