Bridgewater Bancshares Inc (NASDAQ:BWB) has been identified as a candidate through a screening process that joins Mark Minervini's strict Trend Template with a High Growth Momentum (HGM) rating. This two-part method finds companies displaying both solid technical price trends and basic fundamental growth traits, a key part of Minervini's SEPA (Specific Entry Point Analysis) methodology. The plan aims to find market leaders early in their growth phases by confirming they are in a strong uptrend while also showing improving business results.
Technical Strength and Trend Template Alignment
The Minervini Trend Template is made to filter for stocks in a clear Stage 2 uptrend, and BWB presently meets its main technical conditions. This is important because Minervini's research indicates that stocks with high growth potential almost always begin from a prior, strong uptrend.
Key technical metrics for BWB include:
- Price Above Key Moving Averages: The present price is higher than the increasing 50-day ($16.74), 150-day ($15.58), and 200-day ($15.17) simple moving averages. This arrangement confirms positive momentum across short, intermediate, and long-term periods.
- Moving Average Alignment: The 50-day SMA is positioned higher than both the 150-day and 200-day SMAs, and the 150-day SMA is higher than the 200-day SMA. This sequential arrangement of moving averages is a standard sign of a sound, confirmed uptrend.
- Proximity to Highs: The stock is priced within 3% of its 52-week high of $18.01, satisfying the template's condition of being within 25% of a high. Stocks close to their highs often have the strongest momentum and are usually sector leaders.
- Significant Recovery: The present price is about 47% higher than its 52-week low of $11.93, well beyond the 30% minimum requirement. This shows a solid recovery pattern and considerable investor belief.
- Strong Relative Strength: With a Relative Strength (RS) ranking of 75, BWB is doing better than a large part of the market. Minervini notes that the top performers generally have RS rankings in the 80s or 90s, showing BWB has solid but not top-level relative performance currently.
Fundamentals Driving High Growth Momentum
Beyond an interesting chart, the Minervini plan requires sound fundamental health, especially increasing growth in earnings and sales. BWB's High Growth Momentum rating of at least 4 is backed by several main financial metrics that indicate potential for strong performance.
The company's recent quarterly performance is especially notable:
- Earnings Per Share (EPS) Acceleration: The latest quarter displayed a year-over-year EPS growth of 39.3%, a marked increase from the 29.2% growth seen two quarters before. This trend of increasing quarterly earnings is a strong sign of better business conditions that can draw institutional interest.
- Consistent Earnings Surprises: BWB has exceeded EPS estimates in each of the past four quarters, with an average beat of 10.7%. These positive surprises frequently lead analysts to adjust their future estimates higher, creating a pattern of positive momentum.
- Strong Forward Estimates: Analyst confidence is shown in upward revisions; the EPS estimate for next year has been adjusted up by 5.1% over the past three months. This implies increasing belief in the company's future profitability.
- Solid Sales Growth: Recent quarterly revenue growth has been notable, reaching 33.3% in the last quarter. This top-line strength gives a firm base for bottom-line growth.
- Increasing Profit Margins: The profit margin in the most recent quarter was 29.1%, showing an improvement from 26.7% in the previous quarter. Increasing margins can signal pricing strength and operational effectiveness, both signs of a good business.
Technical Analysis Overview
The independent technical analysis for BWB supports the results from the Trend Template screen. The stock receives a solid technical rating of 8 out of 10, reflecting its consistent results across various timeframes. The setup quality is rated a 10, showing the stock is now in a consolidation phase with lower volatility, which often comes before a new price move. The analysis finds a main resistance area between $17.51 and $17.80. A clear move above this level could indicate the next upward phase, with a support area near $16.74 giving a reasonable level for risk management.
For a detailed look at the technical situation, you can examine the full technical analysis report for BWB.
Finding Similar Opportunities
Bridgewater Bancshares Inc presents an interesting example of a stock that fits a structured growth and momentum plan. For investors looking to find similar chances that meet both strict technical and fundamental growth conditions, this High Growth Momentum + Trend Template screen can be a useful beginning for more study.
Disclaimer: This is not investment advice. The content is intended to be used for information and education purposes only. It is not a recommendation to buy or sell any security. Always conduct your own research and consider your financial situation and risk tolerance before investing.
