The search for high-growth stocks often involves moving between the promise of future earnings and the reality of current price trends. A method that works to connect this distance is the strategy made popular by Mark Minervini, which joins strict technical analysis with an emphasis on fundamental improvement. This method, called the Specific Entry Point Analysis (SEPA), sorts for companies already showing strong earnings and sales momentum, while requiring they trade inside a clear and solid technical uptrend. This double condition works to find leaders early in their growth period, giving a system for controlled entry and risk control. One stock that recently appeared through a scan joining Minervini's Trend Template with high-growth momentum filters is ALPHATEC HOLDINGS INC (NASDAQ:ATEC).
Meeting the Minervini Trend Template
The main part of Minervini's technical screening is his Trend Template, a group of fixed rules made to confirm a stock is in a verified, solid uptrend. For a trader using this method, a stock must meet every condition to be seen as a valid choice. Using the given data, ATEC seems to meet the main technical points:
- Price Above Key Moving Averages: The current price of $21.20 trades well above the rising 50-day ($20.00), 150-day ($15.66), and 200-day ($14.56) simple moving averages (SMAs). This order shows continued buying pressure across short, intermediate, and long-term periods.
- Moving Average Order: The 50-day SMA is above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This positive order, often named a "stacked" setup, verifies a solid and structured uptrend.
- Nearness to Highs: ATEC's price is within 25% of its 52-week high of $22.66 and is more than 30% above its 52-week low of $8.81. Minervini states that real market leaders tend to trade close to their highs, not staying far below them.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 96.67, ATEC is doing better than nearly 97% of all stocks. High relative strength is an important filter, as it finds stocks that are leading the market higher, not just moving with it.
This technical view is key to the Minervini strategy because it places capital on stocks where the momentum is clear and institutional interest is probable. It methodically avoids "low-priced" stocks in downtrends, choosing strength and likelihood.
Fundamentals for High-Growth Momentum
While the Trend Template handles the "when," the "why" is based in fundamental improvement. Minervini's study shows that the largest stock market winners are almost always backed by fast growth in earnings and sales. The given data points indicate ATEC is showing this kind of fundamental momentum that high-growth investors look for.
- Earnings Growth Path: The company shows notable gain in its bottom line. Earnings Per Share (EPS) growth for the trailing twelve months (TTM) is up 27.3%. More significantly, recent quarterly momentum is solid, with the last reported quarter showing year-over-year EPS growth of 32.1%, and the quarter before that growing 44.8%.
- Solid and Increasing Sales: Revenue growth is the driver of a high-growth story. ATEC's TTM revenue growth is at 27.1%. Recent quarters show increase, with sales growth of 30.4% in the last quarter, following 27.5% and 22.2% in the prior two quarters. This sequence of continued, high-level revenue growth is a main sign of companies in a growth stage.
- Positive Estimate Changes: Although next-year EPS estimates have seen a small downward change, revenue estimates for the next year have been changed upward by analysts over the last three months. Growing revenue expectations can be a signal of continued fundamental strength.
This mix of solid technicals and improving fundamentals makes the "catalyst" Minervini notes—a reason for large investors to pay attention and push the stock price higher. The strategy suggests that large earnings and sales growth draw big money, which then feeds the solid price trends the Trend Template is made to find.
Technical Condition and Setup Review
Outside the specific Trend Template filters, a wider technical study of ATEC shows a solid condition score. ChartMill's own Technical Rating gives ATEC a complete score of 10 out of 10, showing very good strength across many timeframes and measures. The long-term and short-term trends are both seen as positive, and the stock is doing better than 97% of its peers in the Health Care Equipment & Supplies industry.
Also, the study notes a good setup quality with a rating of 8. The stock has been moving in a range between about $19.33 and $21.65 over the past month, which can help form a clear support level. The report finds a nearby support area around $21.07, which could act as a reasonable place for a protective stop-loss order. A recent "Pocket Pivot" signal, a volume-based measure suggesting buying, adds another positive technical point.
For a complete look at the support levels, momentum indicators, and a sample trade setup, you can see the full technical analysis report for ATEC.
Finding Similar Possibilities
ATEC shows the kind of candidate that a joined technical and fundamental growth scan can find. For investors looking to use this method to find other possible chances, the scan that found ATEC is ready to use. It looks for stocks that meet the strict Minervini Trend Template while also having a high growth momentum rating.
You can find more results from this High Growth Momentum + Trend Template scan here.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on provided data and historical performance, which is not indicative of future results. Always conduct your own thorough research, consider your financial situation and risk tolerance, and consult with a qualified financial advisor before making any investment decisions.
