The method used by trader Mark Minervini centers on finding stocks with high potential by mixing strict technical and fundamental study. His system, contained in the Specific Entry Point Analysis (SEPA) method, looks for companies showing powerful earnings momentum and sales growth while also checking the strength of that fundamental story through an exact technical pattern. The main technical screen is the Minervini Trend Template, a group of rules made to confirm a stock is in a strong, confirmed uptrend. For investors seeking fast growth, this technical base is then combined with a review of strong fundamental momentum, searching for companies showing speeding profitability and revenue increase. This two-part method tries to locate market leaders early in their large price gains.
A Textbook Technical Setup
From a technical view, Cadeler A/S-ADR (NYSE:CDLR) shows a strong case that matches the Minervini Trend Template closely. The template's goal is to screen for stocks in a clear Stage 2 uptrend, skipping basing or falling stocks. CDLR's chart shows the classic signs of such strength.
- Trend Alignment: The stock is trading well above all its main simple moving averages (SMAs), the 50-day ($22.08), 150-day ($20.57), and 200-day ($20.55). Importantly, these averages are arranged in the correct bullish order: the 50-day SMA is above the 150-day, which is above the 200-day SMA. Also, the 200-day SMA itself is in a confirmed uptrend, having moved up from 20.52 to 20.55.
- Proximity to Highs: A part of Minervini's thinking is to concentrate on strength, not weakness. CDLR's present price near $26.09 is within 3% of its 52-week high of $26.79, meeting the "within 25% of the high" rule. At the same time, the price is about 70% above its 52-week low of $15.37, well past the 30% minimum. This shows strong recovery momentum.
- Market-Relative Strength: Leadership is important. CDLR has a ChartMill Relative Strength (CRS) rating of almost 90, meaning it has done better than 90% of the market over the past year. Minervini notes that real leaders often have RS ratings above 70, ideally in the 80s or 90s, as institutional money moves into the strongest stocks first.
This technical combination indicates CDLR is being accumulated and is in a strong position compared to the wider market, a required condition before any fundamental study is done.
Explosive Fundamental Momentum
While the technicals confirm the trend, the fundamental story gives the reason for CDLR's place in a fast-growth momentum screen. The company's recent financial results show the type of explosive growth that Minervini's SEPA method aims to find early.
- Earnings Acceleration: The earnings per share (EPS) growth numbers are notable. Year-over-year EPS growth for the trailing twelve months is at a large 1,388%. More important for momentum, the quarterly sequential speed is clear:
- Most Recent Quarter (Q2Q): +112.5%
- Previous Quarter (Q-1): +683.3%
- Quarter Before That (Q-2): +116.7%
- Sales Growth & Revisions: This earnings jump is backed by strong top-line increase. Revenue growth for the TTM period is over 207%. Quarterly sales growth has been consistently large, above 90% in the last quarter and over 240% in the two quarters before. While recent analyst changes for next year's revenue are a little negative, changes for next year's EPS have been sharply positive, going up over 22% in the last three months, a signal of growing analyst belief in future profitability.
- Profitability Expansion: The method looks for not just growth, but better quality of growth. CDLR's profit margins tell a story of fast operational gain. The profit margin in the last reported quarter was a solid 41.9%, a major recovery from 2.7% two quarters earlier. This shows the company's skill in turning fast revenue increase into large bottom-line results.
This mix of fast-accelerating earnings, strong sales growth, widening margins, and positive estimate changes creates the fundamental "big earnings attract big attention" reason that Minervini points to as a signal before large price moves.
Technical Health and Setup Quality
The given technical study report gives a measured summary of CDLR's chart health. The stock gets a high Technical Rating of 9 out of 10, showing its strong positive long-term and short-term trends and leader status. Maybe more important for a trader looking for entry, it also has a Setup Rating of 8. This shows the stock is in a consolidation phase with lower volatility, having traded in a range between about $23 and $27 over the past month. A high setup rating hints at the formation of a possible base or a Volatility Contraction Pattern (VCP), which can give a lower-risk entry point if the stock moves above the noted resistance near $26.64. You can see the full, detailed technical study for CDLR here.
Conclusion
Cadeler A/S-ADR shows a case where a strong fundamental growth story is being confirmed by a technically clean chart. It fits the strict rules of the Minervini Trend Template, confirming a strong Stage 2 uptrend and market leadership. Its fundamental profile, marked by explosive, accelerating earnings and sales growth, fits the fast-growth momentum investor's search for companies with the chance for large performance. As usual, such screens are a beginning point for more detailed study.
For investors looking for other choices that mix Minervini's trend rules with fast-growth momentum, you can see the predefined screen here.
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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 certain methodologies, but past performance is not indicative of future results. Always conduct your own research and consider consulting with a qualified financial advisor before making any investment decisions. Please read our full disclaimer here.
