CLEARFIELD INC (NASDAQ:CLFD) Combines Minervini Trend Template and High Growth Momentum for Strong Investment Potential

CLEARFIELD INC (NASDAQ:CLFD) has been identified through a screening process that combines Mark Minervini’s Trend Template with a High Growth Momentum (HGM) filter. This method focuses on stocks showing strong technical trends along with fundamental growth traits. The Minervini Trend Template confirms the stock is in an uptrend, while the HGM rating (minimum 4) points to rising earnings or revenue growth, important for growth-focused investors.

Why CLFD Matches the Minervini Trend Template

The Trend Template helps spot stocks in strong uptrends by assessing moving averages, relative strength, and price movement. CLFD meets several key conditions:

• Price Above Key Moving Averages: The stock is above its 50-day ($40.84), 150-day ($34.87), and 200-day ($34.58) moving averages, confirming bullish trends in both short and long terms.
• Rising Moving Averages: The 50-day, 150-day, and 200-day MAs are all moving upward, showing continued momentum.
• Relative Strength: With a ChartMill Relative Strength (CRS) score of 85.28, CLFD beats 85% of all stocks, a sign of market leadership.
• Close to 52-Week High: At $45.20, CLFD is within 3.3% of its 52-week high ($46.76), reflecting strong momentum.
• Major Gain from 52-Week Low: The stock has risen ~90% from its 52-week low ($23.78), showing a strong recovery and growth path.

These factors fit Minervini’s strategy of trading stocks in Stage 2 (uptrend) with high relative strength, which helps reduce risk and increase potential gains.

High Growth Momentum Fundamentals

Beyond technicals, CLFD shows improving growth metrics, making it attractive for momentum investors:

• Earnings Growth:
  • Quarterly EPS growth (Q2Q) jumped 122.5% in the latest quarter.
  • Forward EPS estimates for the next quarter suggest 227.5% growth year-over-year.
  • Analysts have increased next-year EPS estimates by 145.9% over the past three months, showing strong upward adjustments.
• Revenue Growth:
  • Recent quarterly sales grew 27.8% year-over-year.
  • While full-year revenue dropped due to earlier challenges, the rebound in quarterly growth hints at better demand.
• Profit Margin Improvement: The latest quarter had a 2.8% profit margin, up from negative margins earlier in the year.

These fundamentals suggest a company moving from a slowdown to renewed growth, a key driver for high-momentum stocks.

Technical Analysis Summary

ChartMill’s technical report gives CLFD a rating of 9/10, noting:

• Strong long-term and short-term uptrends.
• Trading near 52-week highs, in line with broader market strength.
• Support areas at $43.31–$43.73 and $40.43–$41.43, offering potential downside protection.
• Resistance near $45.21–$45.35, which, if cleared, could lead to more gains.

While the setup quality is rated 6/10 (medium), indicating some volatility, the overall technical picture remains solid. View the full technical report here.

Conclusion

CLFD offers a strong case for both trend and growth investors. Its fit with Minervini’s Trend Template confirms a healthy uptrend, while its earnings growth and analyst upgrades highlight growth potential. Investors should watch the $45.35 resistance level for a breakout chance, with support levels providing clear risk points.

For more stocks meeting these high-growth momentum and trend criteria, check the High Growth Momentum + Trend Template screen.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider risk management strategies before trading.