Advanced Energy Industries (NASDAQ:AEIS) Shows Strong Growth and Momentum

Advanced Energy Industries (NASDAQ:AEIS) stands out as an interesting candidate for investors using a disciplined growth and momentum strategy. This method uses Mark Minervini's strict Trend Template for technical strength with a focus on high-growth fundamentals, aiming to find stocks with the possibility for major price gains.

The strategy is built on a two-part analysis. First, the Minervini Trend Template confirms the stock is in a strong, established uptrend by checking moving averages, price level compared to yearly highs and lows, and relative strength. Second, a High Growth Momentum screen checks the company's basic business condition, looking for solid and often speeding up growth in earnings, sales, and profit margins. This double filter tries to find companies that are not only technically healthy but also fundamentally sound.

Technical Strength: Following the Trend Template

A main idea of the Minervini method is to invest in the direction of the current trend. The Trend Template gives a structured way to find such stocks, and Advanced Energy Industries fits its main technical requirements.

• Moving Average Alignment: The stock's price is trading well above its important moving averages, including the 50-day ($173.22), 150-day ($139.43), and 200-day ($133.00). Also, these averages are ordered in a positive sequence, the 50-day is above the 150-day, which is above the 200-day, confirming good momentum across several timeframes.
• Price Level vs. 52-Week Range: The current price of $202.73 is a large 170% above its 52-week low of $75.01, showing solid recovery and momentum. It is also trading within 5% of its 52-week high of $213.64, a trait of market leaders that often keep doing well.
• Superior Relative Strength: With a ChartMill Relative Strength rating of 93.61, AEIS is doing better than over 93% of all stocks in the market. Minervini points out that stocks with high relative strength are frequently the leaders in a bull market, as institutional money moves into them.

This technical setup shows the stock is in a confirmed Stage 2 advance, the main phase targeted by the strategy for its high growth possibility.

Fundamental Health: The Signs of High Growth

While technicals show the trend, fundamentals give the energy for continued growth. The High Growth Momentum rating for AEIS is backed by several important financial numbers.

• Solid Earnings Growth: The company has shown strong earnings speed-up on a quarterly basis. The most recent quarter showed EPS growth of 76.5% compared to the same quarter last year, a major gain from the 4.8% growth seen two quarters before. This type of speed-up often draws institutional notice and pushes further price gains.
• Positive Analyst Revisions: Analysts have become more positive about the company's future, increasing the average EPS estimate for the next year by over 9% in the last three months. Upward revisions are a good forward-looking sign, hinting that the recent good trends are expected to last.
• Strong Sales Momentum: Revenue growth has also sped up again, with the last quarter showing a 21% year-over-year increase. This top-line growth is important, as it points to healthy demand for the company's products and services beyond just cost-cutting or financial changes.
• Consistent Earnings Surprises: The company has beaten EPS estimates in all of the last four quarters, with an average beat of nearly 12%. A history of going past expectations builds investor trust and can lead to multiple growth.

Technical Report Summary

A look at the detailed technical analysis report for AEIS gives the stock a top rating of 10 out of 10, showing outstanding technical health. The report confirms both short-term and long-term trends are positive and notes the stock is doing better than most of its peers in the Electronic Equipment, Instruments & Components industry. While the excellent technical rating is a good positive, the report does warn that the current setup quality is not perfect for a new entry because of recent price movement, hinting investors look for a calm period to find a lower-risk entry point.

Discover More High-Growth Candidates

Advanced Energy Industries shows the kind of stock that can be found by systematically checking for both technical and fundamental strength. For investors looking for more chances that fit this description, the High Growth Momentum + Trend Template screen is a good starting point for more study.

Disclaimer: This is not investment advice. The content is meant to be used for information and learning purposes only. It is very important to do your own research and think about your personal financial situation before making any investment decisions.