The method used to find possible investment choices joins a strict technical system with attention to the momentum of the basic business. This method is guided by the ideas of Mark Minervini, a two-time U.S. Investing Champion, whose plan stresses trading in the direction of confirmed market leaders. The central technical screen is the Minervini Trend Template, a list made to find stocks in strong, continuing upward trends. This is combined with a review of basic momentum, looking for firms showing faster growth in earnings and sales, a sign of stocks ready for major price gains. The aim is to locate securities where solid price movement is backed by getting better business basics, forming a combination of technical and basic strength.
Caledonia Mining Corp. Plc (NYSEARCA:CMCL) works as a gold producer centered on Zimbabwe, with its main Blanket Mine as the key asset. The firm has grown its holdings through purchases, intending to raise its production level. Lately, CMCL has gained notable investor notice, not only for the basic commodity but for its own operational and financial results.
Technical Fit with the Minervini Trend Template
A main reason CMCL appears as a choice is its almost exact fit with the technical rules of the Minervini Trend Template. This template is important because it requires a focus on stocks already in a confirmed Stage 2 upward trend, staying away from the risky attempt of "catching a falling knife." The template's moving average arrangement makes sure all time periods are lined up in a positive way, which is exactly what CMCL shows.
- Trending Moving Averages: The stock price ($32.63) trades well above its rising 50-day ($27.12), 150-day ($26.66), and 200-day ($23.59) simple moving averages (SMAs). Also, the 50-day SMA is above the 150-day SMA, which is above the 200-day SMA. This order is a classic sign of building momentum across short, medium, and long-term periods.
- Nearness to Highs: A key Minervini idea is to focus on strength, not low price. CMCL's present price is about 244% above its 52-week low of $9.25, showing strong recovery and trend power. While it is about 16% below its 52-week high of $38.75, it stays inside the template's rule of being within 25% of the high, meaning it is still part of the current positive trend.
- Better Relative Strength: Maybe most revealing is the stock's ChartMill Relative Strength (CRS) score of 97.8. This means CMCL has done better than almost 98% of all stocks over the last year. Minervini notes that real market leaders show high relative strength, as institutional money moves into the top performers first.
Basic Momentum for Growth Investors
While the chart shows where the money is going, the basic numbers suggest why. For investors seeking growth, CMCL shows a strong picture of speeding up financial results, which often works as the reason for lasting price increases.
- Fast Earnings Growth: The company's earnings per share (EPS) growth is notable. Year-over-year EPS growth is at 141.5%, and the latest quarter showed a large 196% rise compared to the same time last year. This speeding up is important; it shows the company's profit is not only getting better but doing so at a faster pace.
- Growing Profit Margins: The path of net profit margins shows major operational gain. Margins have grown in order from 5.1% three quarters ago to 33.1% in the last reported quarter. This major growth suggests better cost management, higher received gold prices, or greater operational output at its mines, things that directly increase bottom-line growth.
- Solid Revenue and Cash Flow Growth: Top-line growth backs the bottom-line jump, with quarterly revenue up 52.4% year-over-year. Also, free cash flow per share has grown almost 200% over the past year, giving the firm financial room for more investment, debt paydown, or shareholder benefits.
Technical Condition and Present Position
According to ChartMill's own analysis, CMCL is given a top Technical Rating of 10 out of 10, showing very good condition across many time periods. The long-term and short-term trends are both seen as positive, and the stock is trading in the higher part of its yearly range. The analysis points out strong support levels near $26.10 and $25.01, which could act as reasonable areas for the stock to settle during dips.
However, the report also gives a note of warning for new entries. The Setup Quality Rating is now a low 1, meaning that after its strong recent rise, the stock may be "stretched" in the short term. The summary states that while the technical base is very good, a more appealing, lower-risk entry could appear after a time of price settling or a dip toward support. You can see the full, detailed technical review here: CMCL Technical Analysis Report.
Conclusion
Caledonia Mining Corp. Plc shows the kind of security looked for by a joined technical and growth momentum plan. It satisfies the strict technical needs of the Minervini Trend Template, confirming it is in a strong, leading-position upward trend. At the same time, its basic picture, marked by fast earnings growth, quickly growing margins, and solid cash flow creation, gives the driving fuel that growth investors look for. While the immediate position suggests waiting for a better entry point, the combination of these things makes CMCL a stock deserving of a place on a watchlist for investors using this disciplined method.
Interested in finding more stocks that fit this High Growth Momentum + Trend Template model? You can run the screen yourself to see present results: High Growth Momentum + Trend Template Screen.
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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 reflects the author's interpretation. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
