Investors looking to find high-potential stocks in strong uptrends frequently use systematic methods that mix technical and fundamental analysis. One example is the method made popular by Mark Minervini, which uses a specific "Trend Template" to sort for technically sound stocks showing clear upward momentum. This template confirms a stock is in a definite Stage 2 uptrend by verifying key moving average arrangements, nearness to 52-week highs, and better relative strength. To improve the search for high-growth potential, this technical base is frequently paired with a search for high-growth momentum, looking for companies showing quickening earnings and sales growth. This two-step method tries to find leaders that are both trending positively and supported by strong fundamental growth.
CENTRAL PUERTO SA-SPONSORED ADR (NYSE:CEPU) presents a notable example of a security that meets this strict combined screen. As a major company in Argentina's energy field, working in conventional power generation, renewables, and natural gas transport, the company is located in an important infrastructure industry. The recent technical and fundamental results of its U.S.-traded ADRs suggest it may deserve more attention from growth-focused investors using an organized trend-following method.
Technical Fit with the Minervini Trend Template
The center of Minervini's first screening process is the Trend Template, a group of fixed technical rules made to remove weak stocks and concentrate only on those in strong uptrends. CEPU currently meets these important technical requirements:
- Moving Average Arrangement: The stock is trading above all its key simple moving averages (SMAs). The current price is above the rising 50-day, 150-day, and 200-day SMAs. Also, the 50-day SMA ($15.78) is above both the 150-day ($13.95) and 200-day ($13.40) averages, and the 150-day SMA is above the 200-day SMA. This ordered, rising arrangement is a standard sign of a solid Stage 2 advance.
- Nearness to Highs: A principle of the method is to focus on strength, not low price. CEPU's price is about 130% above its 52-week low of $7.43, showing major recovery and momentum. At the same time, it is trading within about 8% of its 52-week high of $18.50, fitting the template's choice for stocks close to new highs and showing leadership.
- Better Relative Strength: The stock has a ChartMill Relative Strength (CRS) ranking of about 85, meaning it has done better than about 85% of the market. Minervini states that real market leaders usually show RS rankings above 70, ideally in the 80s or 90s, pointing to continued demand and institutional interest.
This technical view confirms that CEPU is in a clear uptrend with solid momentum, passing the first big step of the selection process.
Fundamentals Backing High Growth Momentum
While the Trend Template finds the "how," fundamental analysis tries to explain the "why" behind the price movement. The High Growth Momentum (HGM) part of the screen searches for quickening business results, which often acts as the reason for continued price gains. CEPU's recent financial numbers show notable fundamental quickening:
- High Earnings Growth: The company has reported very high year-over-year earnings per share (EPS) growth. The most recent quarterly EPS jumped by 185% compared to the same quarter last year, after earlier quarters with growth of 267%, 124%, and 194%. On a full-year basis, EPS growth has been very strong, highlighting a strong earnings trend.
- Solid Revenue Growth: Top-line growth is also solid, with the last quarter's revenue rising by over 81% year-over-year. This shows the earnings growth is being pushed by major business growth, not just cost reduction or single events.
- Getting Better Profitability: The company's profit margin in the last reported quarter was about 7.3%. While this is a step down from very high margins in earlier quarters, the full-year profit margin of 31.6% is a major gain from 6.7% in the previous fiscal year, showing a big recovery in operational efficiency and profitability.
- Positive Analyst Changes: Forward-looking estimates show positive feeling. Analyst changes for next year's revenue have gone up by over 22% in the last three months, suggesting increasing belief in the company's growth path.
This mix of rising earnings, growing revenues, and better margins provides the fundamental support that can maintain a long-term uptrend, making the stock interesting for investors aiming for high-growth chances.
Technical Condition and Current Position
According to ChartMill's own analysis, CEPU gets a solid Technical Rating of 8 out of 10. This score shows good condition across several timeframes, with both long-term and short-term trends rated as positive. The stock is trading in the higher part of its 52-week range, performing similarly to the wider market.
However, the analysis also notes a Setup Quality Rating of 3. This shows that while the stock's trend is very good, its recent price movement has been changeable, currently trading near the high of its recent one-month range. For a trader following Minervini's method closely, this suggests the stock may not give a perfect, low-risk entry point right now. The method stresses waiting for periods of less change and specific price points, which are not present currently. So, the stock stays a strong option for a watchlist, waiting for a better consolidation or pullback to give a higher-quality setup. A full list of the support and resistance levels, with the complete technical reasoning, is in the detailed ChartMill Technical Report for CEPU.
Locating Comparable Chances
CEPU shows the kind of security that can be found by systematically mixing trend and growth filters. Investors curious about using this two-part method to find other possible options can review the preset screen: High Growth Momentum + Trend Template.
Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, a recommendation, or an offer to buy or sell any security. The analysis is based on current data and methods, which are subject to change. Investors should do their own full research, think about their personal financial situation, and talk with a qualified financial advisor before making any investment decisions. Past performance is not a guide to future results.