Does CIA CERVECERIAS UNI-SPON ADR (NYSE:CCU) align with Mark Minervini’s trading strategy?

Growth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if CIA CERVECERIAS UNI-SPON ADR (NYSE:CCU) is suited for growth investing. Investors should of course do their own research, but we spotted CIA CERVECERIAS UNI-SPON ADR showing up in our Minervini growth screen, so it may be worth spending some more time on it.

Does CCU pass the Minervini Trend Template check?

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for CCU:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Understanding CCU's High Growth Momentum Score

ChartMill assigns a High Growth Momentum Rating (HGM) to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth and profitability elements, including EPS and revenue growth, accelleration, surprises and revisions. In the case of CCU, the assigned 4 reflects its growth potential:

Earnings Momentum

• CCU has shown positive momentum in its earnings per share (EPS) on a quarter-to-quarter (Q2Q) basis, with a 77.7% increase. This reflects the company's successful execution of its business strategies and its commitment to delivering improved financial results.
• The 1-year EPS growth of CCU (52.37%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• CCU has demonstrated strong q2q revenue growth of 69.06%, suggesting a favorable trend in the company's financials and indicating the potential for continued expansion.
• The sales growth of CCU is accelerating: the current Q2Q growth of 69.06% is above the previous quarter Q2Q growth of -3.04%. Sales momentum and acceleration are key for high growth systems.
• Sales growth accelerated for 2 quarters in a row.
• Analysts' average next Quarter EPS Estimate for CCU has witnessed a 12.51% change in the last 3 months, underscoring the evolving market expectations towards the company's EPS prospects.

Profitability & Financial Strength

• With positive growth in its free cash flow (FCF) over the past year, CCU showcases its ability to generate strong cash flows and maintain a solid financial position. This growth reflects the company's efficient utilization of capital and its commitment to long-term value creation.
• Maintaining a Debt-to-Equity ratio of 0.87, CCU demonstrates a conservative financial approach. This signifies the company's focus on minimizing debt burdens while preserving a solid equity position.

Strong Market Performance

• The Relative Strength (RS) of CCU has been consistently solid, with a current 92.88 rating. This highlights the stock's ability to exhibit sustained price strength and signifies its competitive advantage.

How do we evaluate the setup for CCU?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for CCU is 3:

Although CCU has an excellent technical rating, it does not present a decent entry opportunity at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Our latest full technical report of CCU contains the most current technical analsysis.

Concluding

It looks like CIA CERVECERIAS UNI-SPON ADR meets the Minervini criteria. More high growth momentum breakout stocks can be found in our High Growth Momentum + Trend Template screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.