Investors looking for high-growth chances often mix strict technical screening with fundamental momentum study to find stocks set for continued strong performance. One method that methodically mixes these parts is the plan made famous by Mark Minervini, which uses a particular Trend Template to find equities in clear uptrends, then adds fundamental growth checks to confirm the basic business momentum backs the price movement. This two-part method helps find companies that are not only technically solid but also show the earnings and sales speed typical of market front-runners. A stock now clearing such a multi-factor screen is The Vita Coco Company, Inc. (NASDAQ:COCO).
Meeting the Minervini Trend Template
The Minervini Trend Template is made to filter for stocks showing clear and maintained upward momentum across various time periods. COCO currently meets the main technical rules of this template, which is important for the plan as it concentrates capital on assets where the trend is favorable, thus raising the chance of a continued rise.
Key technical matches for COCO include:
- Moving Average Arrangement: The stock's present price is above its rising 50-day, 150-day, and 200-day simple moving averages. Also, the 50-day SMA is above the 150-day SMA, which is above the 200-day SMA. This ordered arrangement is a standard indicator of a sound, long-term uptrend.
- Nearness to Highs: COCO is trading within 15% of its 52-week high, a level Minervini prefers as it shows the stock is displaying strength and not staying low. At the same time, the price is more than 60% above its 52-week low, showing a major rebound and clear bullish trend.
- Strong Relative Performance: With a ChartMill Relative Strength rating of 85, COCO is doing better than most of the market. High relative strength is a key part of the plan, as it finds industry front-runners that often keep leading.
Fundamentals Backing High Growth Momentum
For a stock to be more than a technical breakout and to have the drive for a maintained rally, the Minervini plan stresses strong basic fundamentals. COCO shows several measures that make it suitable for high-growth investors, fitting with the "High Growth Momentum" screen requirements.
The company's growth picture is marked by:
- Strong Earnings Growth: COCO has shown major earnings power, with EPS growth of over 16% on a trailing twelve-month basis. More significantly, recent three-month speed is solid, with the last quarter showing EPS growth of 25% year-over-year.
- Speeding Up Revenue: Top-line growth is a strong driver, and COCO's revenue growth of over 23% (TTM) is notable. The most recent quarter showed a notable sales jump of over 37% compared to the same time last year.
- Positive Analyst Updates: The view from analysts is getting better, with upward changes to next year's EPS estimates of over 5% in the last three months. This frequently comes before continued institutional interest and price gains.
- Steady Delivery: The company has a record of beating forecasts, exceeding revenue estimates in each of the last four quarters and EPS estimates in three of the last four.
Technical Condition and Setup Summary
A look at the detailed technical study report for COCO supports its solid position. The report gives COCO a high-level technical rating of 9 out of 10, stating that both its short-term and long-term trends are positive. The stock is a front-runner in the Beverages industry, doing better than 81% of its competitors. While the report notes that the stock is currently moving in a wider band, it has found a key support area between $39.01 and $41.64, offering a possible zone for planned stop-loss setting for traders watching the position.
Finding Additional High-Growth Choices
The mix of a solid technical trend and speeding fundamental growth makes COCO a notable candidate for investors using a Minervini-like plan. For those wanting to find similar chances, the preset screen that found COCO is ready to use. You can find more high-growth momentum stocks that meet the Minervini Trend Template by using this screening tool.
Disclaimer: This is not investment advice. The content is meant for information and learning purposes only. It is vital to do your own study and think about your personal money situation before making any investment choices. Please read our full disclaimer and terms of use to know our responsibilities.
