TRADEWEB MARKETS INC-CLASS A (NASDAQ:TW) operates electronic marketplaces across rates, credit, money markets and equities, and it has surfaced in a screen designed to find stocks that combine strong underlying growth with an emerging technical breakout. The strategy behind that screen is straightforward: start with companies whose earnings and revenue are expanding well above market rates, require decent profitability and a healthy balance sheet, then overlay a technical setup that suggests the stock is about to move. That combination is meant to avoid the two classic growth traps, paying up for a story the financials do not support, and buying a fundamentally sound company while its chart is still in a downtrend.
A screen built on growth plus timing
The Strong Growth approach used here is not a momentum screen that chases whatever has already moved. It filters first on business fundamentals, then looks for a technical pattern that could mark the start of a new advance. For Tradeweb, both parts of the screen are working, although not without caveats.
Fundamentals: quality growth at a premium valuation
Tradeweb earns a ChartMill fundamental rating of 7 out of 10. The underlying report is notably strong in profitability and health, with a profitability score of 7 and a health score of 9 out of 10. That matters because growth strategies tend to fail when a company is expanding on borrowed money or burning cash. Tradeweb has no outstanding debt and carries a current ratio of 4.84, which puts it in the top tier of its industry.
The growth side is also solid:
- EPS grew 16.98% over the past year, with a longer-term average annual EPS growth of 21.51%.
- Revenue grew 14.04% in the past year, with a longer-term average of 18.12%.
- Forward EPS growth is estimated at 18.43% per year, while forward revenue growth is pegged around 10.56%.
- Profit margin of 40.57% and operating margin of 43.54% place the company in the upper tier of its capital markets peer group.
Those numbers describe a business that is still compounding at a healthy clip, not one that has simply gotten cheaper. The tradeoff is valuation. Tradeweb trades at a price/earnings ratio of 28.24 and a forward P/E of 22.54, which the fundamental report labels as expensive relative to much of its industry. The counterweight is that expected earnings growth of 15.52% makes the PEG ratio look reasonable, and the high profitability provides some justification for the multiple. Investors who want to see the full fundamental breakdown can consult the fundamental analysis report.
Technical picture: a setup is forming
Tradeweb’s technical rating is only 5 out of 10, reflecting weak performance over the past year. The stock has lagged the S&P 500 meaningfully, and 78% of all stocks have outperformed it on a 12-month basis. The medium-term picture is also negative, but the short-term trend has turned positive while the long-term trend is neutral, and that is part of the reason the setup rating is stronger.
The setup rating comes in at 8 out of 10, and that is the part of the screen that matters for a breakout strategy. Prices have been consolidating recently, and the stock is trading near the high of its one-month range, between 94.29 and 108.75. The current price of 107.04 sits just below a resistance zone from 107.05 to 108.86. A move through that zone could open the door to the next resistance level near 114.24. Support is visible around 106.71 and again near 97.12, so the risk around the setup can be defined relatively tightly.
The technical report also notes signs of large-player interest in the stock in recent days, based on the Effective Volume indicator. For a stock that is still consolidating, that can be an early signal that institutional money is positioning ahead of a possible breakout. In the context of a positive S&P 500 trend, a fundamentally sound company with a decent setup pattern becomes more interesting than the medium technical rating alone would suggest. The full chart and technical details can be reviewed in the technical analysis report.
What to watch
The screen is not saying that Tradeweb is a low-risk buy. It is saying that the stock has the fundamental profile of a strong grower and that the technical pattern is showing some constructive signs. The key levels are the resistance zone starting at 107.05 and the support zone around 106.71. A breakout on volume above the resistance would align with the setup; losing the support zone would negate it.
For investors who use this methodology, the point is repeatability. A stock can have excellent growth metrics and still be a poor investment if the chart is broken. Likewise, a great chart cannot fix a deteriorating business. The Strong Growth screen with technical setup ratings tries to solve both sides of that equation.
Finding more candidates with the same methodology
Tradeweb is one example of what this screen can surface, but it is not the only one. Investors looking for additional stocks that combine strong growth, decent profitability and health, and a technical setup worth watching can run the same methodology in the screener. More stocks matching these criteria can be found on the Strong Growth technical setup screen.
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 »
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Tradeweb Markets (NASDAQ:TW) Combines Strong Growth with a Constructive Technical Setup
TRADEWEB MARKETS INC-CLASS A (NASDAQ:TW) operates electronic marketplaces across rates, credit, money markets and equities, and it has surfaced in a screen designed to find stocks that combine strong underlying growth with an emerging technical breakout. The strategy behind that screen is straightforward: start with companies whose earnings and revenue are expanding well above market rates, require decent profitability and a healthy balance sheet, then overlay a technical setup that suggests the stock is about to move. That combination is meant to avoid the two classic growth traps, paying up for a story the financials do not support, and buying a fundamentally sound company while its chart is still in a downtrend.
A screen built on growth plus timing
The Strong Growth approach used here is not a momentum screen that chases whatever has already moved. It filters first on business fundamentals, then looks for a technical pattern that could mark the start of a new advance. For Tradeweb, both parts of the screen are working, although not without caveats.
Fundamentals: quality growth at a premium valuation
Tradeweb earns a ChartMill fundamental rating of 7 out of 10. The underlying report is notably strong in profitability and health, with a profitability score of 7 and a health score of 9 out of 10. That matters because growth strategies tend to fail when a company is expanding on borrowed money or burning cash. Tradeweb has no outstanding debt and carries a current ratio of 4.84, which puts it in the top tier of its industry.
The growth side is also solid:
Those numbers describe a business that is still compounding at a healthy clip, not one that has simply gotten cheaper. The tradeoff is valuation. Tradeweb trades at a price/earnings ratio of 28.24 and a forward P/E of 22.54, which the fundamental report labels as expensive relative to much of its industry. The counterweight is that expected earnings growth of 15.52% makes the PEG ratio look reasonable, and the high profitability provides some justification for the multiple. Investors who want to see the full fundamental breakdown can consult the fundamental analysis report.
Technical picture: a setup is forming
Tradeweb’s technical rating is only 5 out of 10, reflecting weak performance over the past year. The stock has lagged the S&P 500 meaningfully, and 78% of all stocks have outperformed it on a 12-month basis. The medium-term picture is also negative, but the short-term trend has turned positive while the long-term trend is neutral, and that is part of the reason the setup rating is stronger.
The setup rating comes in at 8 out of 10, and that is the part of the screen that matters for a breakout strategy. Prices have been consolidating recently, and the stock is trading near the high of its one-month range, between 94.29 and 108.75. The current price of 107.04 sits just below a resistance zone from 107.05 to 108.86. A move through that zone could open the door to the next resistance level near 114.24. Support is visible around 106.71 and again near 97.12, so the risk around the setup can be defined relatively tightly.
The technical report also notes signs of large-player interest in the stock in recent days, based on the Effective Volume indicator. For a stock that is still consolidating, that can be an early signal that institutional money is positioning ahead of a possible breakout. In the context of a positive S&P 500 trend, a fundamentally sound company with a decent setup pattern becomes more interesting than the medium technical rating alone would suggest. The full chart and technical details can be reviewed in the technical analysis report.
What to watch
The screen is not saying that Tradeweb is a low-risk buy. It is saying that the stock has the fundamental profile of a strong grower and that the technical pattern is showing some constructive signs. The key levels are the resistance zone starting at 107.05 and the support zone around 106.71. A breakout on volume above the resistance would align with the setup; losing the support zone would negate it.
For investors who use this methodology, the point is repeatability. A stock can have excellent growth metrics and still be a poor investment if the chart is broken. Likewise, a great chart cannot fix a deteriorating business. The Strong Growth screen with technical setup ratings tries to solve both sides of that equation.
Finding more candidates with the same methodology
Tradeweb is one example of what this screen can surface, but it is not the only one. Investors looking for additional stocks that combine strong growth, decent profitability and health, and a technical setup worth watching can run the same methodology in the screener. More stocks matching these criteria can be found on the Strong Growth technical setup screen.
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 »