Looking for one of the highest growth opportunities in the market today? Try Essent Group (ESNT). Here’s your trade. (April 07, 2017)
I want to look at Essent ( NYSE:ESNT ) today. Here is the deal: This is a PMI company (private mortgage insurance and reinsurance for mortgages), they are in the financial sector. They really benefit from the growth in the real estate mortgage business. Home building, real estate is actually doing pretty well.
First of all we will look at the chart and then I will talk about the fundamentals a little bit. This is a stock that is actually a pretty easy trading stock. After it kind of started going here it consolidates, it breaks out. Ultimately it kind of consolidates more, every so often tags this 50-day moving average. It really starts to run, consolidates here, breaks out, runs again and then now it is in this consolidation right here. So it is forming this high base, a real base was down here. Fine. Then it has paused several times along the way.
Well this is a really positive development for the stock, because it has been trading this way for over two months and this is what we want to see. Now fundamentally, why do you want to buy this stock? Okay, lets talk about that for a second. Their growth, their earnings per share growth is in the top 99th percentile or the 1 percentile, however you want to look at it. Their growth rate, in their earnings per share, is in the top 1 percent of the market. Over the last three years it has been 64 percent, it is projected to be a heck of a lot higher going forward.
So, fundamentally this is where you want to be. Technically, it is where you want to be. Earnings are still a month away. If this stock starts moving up above, lets say, 37.25 (I am going to go ahead and set a price alert), I will set a price alert for 37.25. If this is hit go ahead and consider buying this stock, because it is starting to breakout from a prolonged base. As long as the stock stays above this 50-day moving average you want to be long this stock.