CARETRUST REIT INC (NYSE:CTRE) is a real estate investment trust that has recently demonstrated the kind of accelerating earnings and sales growth typically sought by high growth momentum investors, while also displaying a technical setup that makes it a candidate for a breakout trade.
High Growth Momentum Appeal
The ChartMill High Growth Momentum Rating (HGM) of 6 out of 10 for CareTrust REIT reflects a solid earnings and sales trajectory, even if it does not achieve a perfect score across every sub-metric. The rating blends several elements that are central to high growth momentum strategies, such as those inspired by CANSLIM and Minervini approaches. Key observations from the data include:
- EPS growth 1Y (TTM): 63.2%, with the last full fiscal year showing 89.0% growth.
- Sales growth 1Y (TTM): 58.4%, with the most recent quarter up 59.4% year-over-year.
- Acceleration in sales: Sales Q2Q growth has been 71.2% (Q-2), 55.1% (Q-1), and 59.4% (Q), indicating sustained top-line momentum.
- Analyst revisions positive: Next year EPS estimates have been revised up 2.0% and revenue estimates up 7.0% over the last three months.
- Profit margin expansion: The profit margin for the last full fiscal year (67.1%) is well above the prior year (42.1%), signaling improving operational efficiency.
The HGM rating also accounts for earnings surprises; CareTrust REIT has beaten EPS estimates in two of the last four quarters, with an average beat of 7.6%, and has beaten revenue estimates in three of the last four quarters, averaging 11.7% beats. While the recent quarterly EPS growth was flat (0.0% Q2Q), the prior quarters showed strong gains (56.3% and 66.7%), and the long-term trend remains robust.
These metrics matter because high growth momentum strategies seek stocks that are outpacing the market in both earnings and sales, with the added confirmation of analyst upgrades and expanding margins. CareTrust REIT’s performance in these areas places it clearly within that category.
Technical Strength and Setup Quality
Alongside its fundamental momentum, the stock also screens as technically exceptional. The ChartMill Technical Rating is a perfect 10 out of 10, while the Setup Quality Rating is 8 out of 10. This combination is rare and suggests both a strong uptrend and a well-defined consolidation zone.
- Trends: Both short-term and long-term trends are positive. The stock is trading near its 52-week high, outperforming 82% of all stocks over the past year.
- Setup pattern: A bull flag pattern has formed, with prices pulling back on lower volume — a typical precursor to a potential breakout.
- Support and resistance: A resistance zone exists between $42.67 and $43.41, while three support levels lie below, the nearest at $41.80–$42.17.
For growth momentum investors, technical strength is critical: a stock with a high Setup Quality Rating provides a defined entry point with a manageable risk. CareTrust REIT’s suggested trade setup (entry above $43.42, stop at $41.79) aligns with this principle. Investors seeking a deeper breakdown of the technical picture can review the full technical analysis report.
Bringing the Two Strategies Together
A stock that marries strong earnings momentum with a clear technical setup is exactly what the screened methodology targets. CareTrust REIT’s HGM rating of 6, while not the highest possible, is supported by the accelerating sales and expanding margins that define quality growth. The technical side — a perfect TA rating and a high setup score — confirms that the stock is in a healthy uptrend and currently forming a low-risk entry zone.
Investors looking for similar opportunities can explore more stocks that meet these combined criteria by using the high growth momentum breakout setups screen. That screen filters for stocks with a Setup Rating above 7, a Technical Rating above 7, and an HGM Rating above 4, bringing together the fundamental and technical elements discussed here.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »
View the Zacks #1 Rank List
CareTrust REIT (CTRE) Combines High Growth Momentum with Bull Flag Breakout Setup
CARETRUST REIT INC (NYSE:CTRE) is a real estate investment trust that has recently demonstrated the kind of accelerating earnings and sales growth typically sought by high growth momentum investors, while also displaying a technical setup that makes it a candidate for a breakout trade.
High Growth Momentum Appeal
The ChartMill High Growth Momentum Rating (HGM) of 6 out of 10 for CareTrust REIT reflects a solid earnings and sales trajectory, even if it does not achieve a perfect score across every sub-metric. The rating blends several elements that are central to high growth momentum strategies, such as those inspired by CANSLIM and Minervini approaches. Key observations from the data include:
The HGM rating also accounts for earnings surprises; CareTrust REIT has beaten EPS estimates in two of the last four quarters, with an average beat of 7.6%, and has beaten revenue estimates in three of the last four quarters, averaging 11.7% beats. While the recent quarterly EPS growth was flat (0.0% Q2Q), the prior quarters showed strong gains (56.3% and 66.7%), and the long-term trend remains robust.
These metrics matter because high growth momentum strategies seek stocks that are outpacing the market in both earnings and sales, with the added confirmation of analyst upgrades and expanding margins. CareTrust REIT’s performance in these areas places it clearly within that category.
Technical Strength and Setup Quality
Alongside its fundamental momentum, the stock also screens as technically exceptional. The ChartMill Technical Rating is a perfect 10 out of 10, while the Setup Quality Rating is 8 out of 10. This combination is rare and suggests both a strong uptrend and a well-defined consolidation zone.
For growth momentum investors, technical strength is critical: a stock with a high Setup Quality Rating provides a defined entry point with a manageable risk. CareTrust REIT’s suggested trade setup (entry above $43.42, stop at $41.79) aligns with this principle. Investors seeking a deeper breakdown of the technical picture can review the full technical analysis report.
Bringing the Two Strategies Together
A stock that marries strong earnings momentum with a clear technical setup is exactly what the screened methodology targets. CareTrust REIT’s HGM rating of 6, while not the highest possible, is supported by the accelerating sales and expanding margins that define quality growth. The technical side — a perfect TA rating and a high setup score — confirms that the stock is in a healthy uptrend and currently forming a low-risk entry zone.
Investors looking for similar opportunities can explore more stocks that meet these combined criteria by using the high growth momentum breakout setups screen. That screen filters for stocks with a Setup Rating above 7, a Technical Rating above 7, and an HGM Rating above 4, bringing together the fundamental and technical elements discussed here.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »