A methodical way to find high-potential stocks joins strict technical study with fundamental growth measures. The system, made famous by well-known trader Mark Minervini, uses his Trend Template to find securities showing strong upward momentum and institutional backing. This structure is then improved by filtering for companies showing outstanding earnings and sales growth, making sure picks have both the technical setup and fundamental strength needed for lasting growth. This two-part method tries to find leaders early in their growth periods while controlling risk through exact entry and exit points.
Technical Strength and Trend Template Match
ASA Gold and Precious Metals Ltd (NYSE:ASA) shows a strong technical profile that matches closely with the Minervini Trend Template. This template is made to find stocks in a confirmed Stage 2 uptrend, which is important for the method as it places capital on assets with confirmed momentum, this raising the chance of continuation.
The stock currently meets the main technical requirements:
- Price Above Key Moving Averages: The current price of $50.11 trades well above the rising 50-day ($41.66), 150-day ($34.50), and 200-day ($31.90) simple moving averages. This stacked order confirms a strong and healthy uptrend across multiple timeframes.
- Proximity to 52-Week Highs: The share price is within 7% of its 52-week high of $53.76, a key part of the Trend Template. Stocks trading near new highs often have little overhead resistance and have strong momentum, qualities Minervini looks for in market leaders.
- Significant Recovery from Lows: The current price sits about 159% above its 52-week low of $19.37. This large move shows powerful buying interest and a successful change from a basing time to a markup phase.
- Superior Relative Strength: With a ChartMill Relative Strength rating of 95.58, ASA is doing better than the vast majority of the market. High relative strength is a foundation of the method, as it finds securities that are in demand no matter the wider market conditions.
Fundamental Growth Measures
Beyond its technical skill, ASA shows the kind of explosive fundamental growth that high-growth momentum investors look for. The method states that "big earnings attract big attention," and ASA's recent financial performance is certainly attention-getting.
The company's earnings and profitability have risen sharply:
- Earnings Per Share (EPS) Growth: The trailing twelve-month (TTM) EPS stands at $10.09, showing a huge year-over-year growth of over 1,500%. Recent quarterly EPS growth numbers are also very strong, with the last quarter showing a 209% increase compared to the same quarter last year.
- Profit Margin Expansion: Profit margins have grown greatly, with the last reported quarter showing a margin of 7,908%. This shows significant operational leverage and pricing power, a quality often seen in companies going through a fundamental catalyst.
- Free Cash Flow Generation: The company is also making a lot of free cash flow, with FCF per share (TTM) at $13.99. Strong cash flow backs the sustainability of growth and gives financial flexibility.
High-Level Technical Analysis Summary
The independent technical report for ASA supports this strong outlook, giving the stock a perfect technical rating of 10 out of 10. The report notes a steady positive performance in both short-term and long-term trends. While the technical health is seen as excellent, the report also shows that the current price movement has been somewhat unstable, leading to a lower setup quality rating. This suggests that while ASA is a technically sound investment, investors might gain from waiting for a more defined consolidation period to find a better, lower-risk entry point.
Find More High-Growth Momentum Candidates
ASA was found using a systematic screen that joins the Minervini Trend Template with a High Growth Momentum rating. For investors looking for other opportunities that meet this strict mix of technical and fundamental requirements, more study can be done. More qualifying stocks can be found using this screening method here.
Disclaimer: This is not financial advice. The content is intended to be used for information and education purposes only. It is crucial to conduct your own research and consider your personal financial situation before making any investment decisions.
