Stock Financial & Holmes Law Growth Analysis

Overview

This indicator is a specialized fundamental analysis tool designed to identify market opportunities by comparing Earnings Growth against Price Momentum (Slope). Unlike standard valuation tools, it implements the "Holmes' Law" logic—a theory suggesting that price trends often lead earnings trends by approximately 3 months.

By synchronizing quarterly financial reports (EPS) with real-time price action, this script helps traders identify when a stock’s price momentum is outperforming its earnings growth, signaling potential early-stage trend entries.

Key Features

1. Holmes' Law Growth Comparison (Core Feature)

The primary mode compares the Quarter-over-Quarter (QoQ) Earnings Per Share (EPS) growth with the Price growth over the same period.

Green Signal (Lime Line): Occurs when Price Growth > Earnings Growth. This indicates that the price slope is leading the earnings trend, often seen as a "Buy Signal" or a sign of institutional accumulation ahead of fundamental confirmation.

Red Signal: Occurs when Earnings Growth exceeds Price Growth, suggesting the price has not yet reacted to fundamental improvements or is lagging significantly.

2. Smart Auto-Alignment

Financial data is often "chunky" (updated quarterly). This script features an Auto-Align Financial Cycle mode:

It automatically detects the exact date of the last quarterly earnings release.

It calculates price growth starting precisely from that date, ensuring a mathematically accurate "Apples-to-Apples" comparison between price action and the current financial period.

3. Multi-Metric Valuation

Beyond growth rates, the script provides classic valuation metrics for quick reference:

Price-to-Earnings (PE): Based on Trailing Twelve Months (TTM) EPS.

Price-to-Book (PB): Based on the most recent quarterly Book Value Per Share (BVPS).

Visual Guide

Main Line (Colored): Represents the difference between Price and Earnings growth.

Yellow Line: The raw Price Growth percentage for the current quarter.

Gray Columns: The raw EPS Growth percentage compared to the previous quarter.

White Diamonds: Located at the bottom of the pane, these mark the exact days a new financial report was integrated into the chart.

How to Use

Trend Scouting: Switch to "Earnings vs Price Growth" mode. Look for the main line turning Lime. This indicates the market is pricing in future growth before it appears in the EPS figures.

Divergence Watch: If EPS growth (Gray columns) is skyrocketing but the Price Growth (Yellow line) remains flat, the stock may be undervalued or facing a specific sentiment headwind.

Risk Management: Be cautious when Price Growth is significantly higher than Earnings Growth (very high Lime peaks) right before a new Earnings Release Day. As Gordon Holmes warned, if actual data fails to meet the high expectations priced in, a "gap down" may occur.

Settings

Select Metric: Choose between PE, PB, or the Growth Comparison mode.

Auto-Align Financial Cycle: (Recommended) Automatically syncs price lookback to the last财报 (earnings report).

Manual Lookback Period: If Auto-Align is off, define a fixed number of days (e.g., 63 days for a standard quarter).

Disclaimer: This indicator is for informational purposes only and does not constitute financial advice. Financial data is sourced from TradingView's database; availability may vary by ticker and region.