Broadcom Inc. (NASDAQ:AVGO) Meets Minervini Trend Template with Strong Growth Momentum

Broadcom Inc. (NASDAQ:AVGO) has recently appeared on a specific screen made to find stocks that fit Mark Minervini's strict Trend Template while also displaying the solid fundamental growth traits wanted by momentum investors. This dual method aims to find companies that are not only in strong technical uptrends but are also supported by improving business fundamentals, a key feature of Minervini's Specific Entry Point Analysis (SEPA) methodology. The strategy focuses on stocks showing leadership through price strength, better relative performance, and good earnings and sales growth.

Meeting the Minervini Trend Template

The Minervini Trend Template is a basic technical checklist used to confirm a stock is in a defined and strong uptrend. It removes weaker stocks by requiring specific arrangements in moving averages, price level compared to yearly highs and lows, and better relative strength. A stock must meet all these conditions to be seen as a possible candidate.

Broadcom currently meets the main technical needs of the Trend Template, showing a solid and sound uptrend:

• Price Above Key Moving Averages: The stock is trading significantly above its rising 50-day ($348.43), 150-day ($294.98), and 200-day ($269.00) simple moving averages. This arrangement confirms that buyers are in charge across short, intermediate, and long-term periods.
• Moving Average Arrangement: The 50-day moving average is located above both the 150-day and 200-day averages, and the 150-day is above the 200-day. This ordered, positive setup is a main part of the Trend Template, indicating continued upward momentum.
• Nearness to Highs: With a current price of $377.96, AVGO is trading within 25% of its 52-week high of $386.48, showing it is a market leader, not a follower. Also, the stock is trading 174% above its 52-week low, a signal of great strength.
• Better Relative Strength: A vital part of the strategy, Broadcom's Relative Strength (RS) ranking of 96.48 shows it is doing better than 96% of all stocks in the market. Minervini states that the top performers are usually those with RS rankings above 70, and preferably in the 80s or 90s.

Showing High Growth Momentum

Beyond a strong chart, the Minervini strategy needs outstanding fundamental health to find "super performers." The High Growth Momentum (HGM) rating assesses a company's earnings power, sales growth, and profit margins. Broadcom displays the strong growth profile that high-growth investors look for.

• Good Earnings Growth:
  • Earnings per Share (EPS) for the trailing twelve months (TTM) increased by 38.5%.
  • Recent quarterly growth is more notable, with the last quarter showing a 36.3% year-over-year rise in EPS.
• Increasing Revenue Expansion:
  • Revenue over the past year grew by 28.0%.
  • Sales growth in the most recent quarter was a good 22.0%.
• Solid and Gaining Profitability: The company keeps sound profit margins, with the last reported quarter showing a net margin of 26.0%. This shows an ability to turn top-line growth into bottom-line profits efficiently.
• Positive Analyst Outlook: The average analyst estimate for next year's EPS has been increased by 1.2% over the last three months, showing rising confidence in the company's future earnings potential.

Technical Health Summary

The complete technical analysis report for Broadcom gives the stock a high score of 9 out of 10, reflecting its very good technical health. The long-term trend is rated as positive, and the stock is recognized for its steady strong performance, ranking in the top 4% of all stocks over the past year and leading 89% of its industry group. While the stock is technically in good shape, the report mentions that its setup rating is presently lower because of recent price movements, indicating that investors could look for a more clear consolidation pattern for a better, lower-risk entry point.

You can review the full technical breakdown in the AVGO Technical Analysis Report.

Finding Similar Opportunities

Broadcom represents the kind of high-quality, high-momentum stock that this systematic method aims to find. For investors looking to copy this process and find other companies that meet these strict technical and fundamental conditions, the screening method used to find AVGO is available for more study.

Discover more stocks that fit the High Growth Momentum and Trend Template profile.

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