Identifying promising growth stocks often involves a dual approach: combining rigorous technical analysis to confirm a strong price trend with fundamental scrutiny to ensure underlying business momentum. One systematic method for this is the Mark Minervini strategy, which uses a specific Trend Template to filter for technically sound stocks showing clear uptrends, and then adds fundamental criteria to select companies showing accelerating earnings and sales growth. This approach seeks to find market leaders early in their major price advances.
BWX Technologies Inc (NYSE:BWXT) recently appeared through a screening process made to apply this methodology. The screen first enforced Minervini's Trend Template to establish a sound technical foundation, and then required a minimum "High Growth Momentum" rating to filter for companies with good fundamental growth characteristics. We examine how BWXT measures up against these dual criteria.
Meeting the Minervini Trend Template
The center of Minervini's strategy is identifying stocks in a confirmed Stage 2 uptrend, avoiding those in basing or decline phases. The Trend Template provides a strict checklist of technical conditions BWXT currently meets:
- Price Above Key Moving Averages: The stock's last price of $193.20 trades well above its rising 150-day ($170.71) and 200-day ($155.02) simple moving averages (SMAs). This alignment shows sustained long-term bullish momentum.
- Moving Average Alignment: The shorter-term 50-day SMA ($184.08) is positioned above both the 150-day and 200-day SMAs, a classic configuration indicating the trend's strength across multiple timeframes.
- Proximity to Highs: A key part of the strategy is to focus on strength, not deep value. BWXT's price is within 25% of its 52-week high of $218.50, showing it is acting like a market leader rather than a laggard. At the same time, it remains more than 30% above its 52-week low of $84.21, confirming a significant recovery trend is already in place.
- Superior Relative Strength: With a ChartMill Relative Strength (CRS) score of 88.9, BWXT is outperforming nearly 89% of all stocks in the market over the past year. Minervini notes that the best performers typically have RS scores above 70, as they are the ones attracting institutional capital during market advances.
This technical picture meets the main goal of the Trend Template: to ensure an investor is only considering stocks that are already in a strong, established uptrend, thereby improving the odds in their favor by trading with the prevailing market direction.
Assessing High Growth Momentum
While a strong chart is essential, the Minervini strategy looks for the "why" behind the price move by examining fundamental acceleration. The screen's "High Growth Momentum" filter looks for evidence of improving business performance, and BWXT's recent financial metrics provide good support.
- Earnings Growth Acceleration: The company is showing a noticeable pickup in profitability. Year-over-year earnings per share (EPS) growth for the most recent quarter came in at 20.5%, following an even stronger 24.4% growth in the prior quarter. This sequential acceleration is a positive signal that operational momentum is building.
- Consistent Earnings Surprises: A characteristic of growth stocks is consistently exceeding expectations. BWXT has beaten analyst EPS estimates in each of the last four quarters, with an average surprise of 17.7%. These positive surprises often act as catalysts, driving renewed investor interest and price re-ratings.
- Strong Revenue Expansion: Top-line growth is also notable. Revenue grew 28.9% year-over-year last quarter, a significant acceleration from the 12.1% growth reported the quarter before. Good and accelerating sales growth provides a solid base for sustained earnings expansion.
- Healthy Cash Generation: The company's free cash flow per share has increased over 440% in the past twelve months, indicating good operational efficiency and financial health, which provides flexibility for further growth initiatives or shareholder returns.
These fundamental factors match the strategy's search for companies experiencing a clear improvement in their business path, which often comes before or along with major stock price appreciation.
Technical Health and Current Setup
ChartMill's own analysis provides a consolidated view of BWXT's technical standing. The stock earns a high Technical Rating of 9 out of 10, reflecting very good overall technical health. The report notes both long-term and short-term trends are positive, and the stock's performance over the past year has been strong and steady.
However, the analysis also offers a note of caution for immediate entry. The Setup Quality Rating is currently a 3. This indicates that while the long-term trend is very good, the stock's recent price movement has been volatile, trading in a wide range over the past month. From a strict Minervini view, this suggests the stock may not be in a tight, low-volatility consolidation pattern (like a Volatility Contraction Pattern) that usually offers a lower-risk entry point. The summary advises that it "may be a good idea to wait for a consolidation or pullback before considering an entry."
For a detailed breakdown of the support levels, trend analysis, and full technical commentary, you can review the complete ChartMill Technical Report for BWXT.
Conclusion
BWX Technologies Inc presents a good case study of a stock that matches the principles of growth and momentum investing as framed by the Minervini methodology. It successfully passes the strict technical filters of the Trend Template, confirming its participation in a strong market uptrend. Furthermore, its fundamental profile shows accelerating earnings and revenue growth, along with consistent positive surprises, which meet the criteria for high growth momentum.
The main consideration for investors, as highlighted by the technical report, is timing. The stock's high technical rating confirms its leadership status, but the lower setup rating suggests patience may be needed for those seeking an optimal, lower-risk entry point aligned with precise pattern breakouts.
Interested in finding other stocks that meet similar high-growth and technical strength criteria? You can explore the current screening results via this High Growth Momentum + Trend Template screen.
Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, nor does it constitute a recommendation to buy, sell, or hold any security. The analysis is based on data provided and screening methodologies described, which have inherent limits. Investors should conduct their own thorough research and consider their individual financial circumstances and risk tolerance before making any investment decisions. Please read our full disclaimer here.
