Investors looking to find high-potential growth stocks frequently use systematic methods that mix strict technical study with fundamental momentum. One well-known method is the strategy made popular by Mark Minervini, which uses a specific Trend Template to find stocks in strong, confirmed uptrends. This template works as a quality filter, making sure a security shows firm price action, good moving average arrangements, and better relative strength before it is even reviewed for investment. To improve the search for notable opportunities, this technical base can be joined with a focus on high-growth fundamentals, looking for companies showing speeding earnings, solid sales growth, and getting better operational measures. This two-part method tries to catch leaders early in their growth periods while they are still in a firm technical state.
CPS TECHNOLOGIES CORP (NASDAQ:CPSH) appears as a candidate that justifies a more detailed review through this joined view of technical firmness and fundamental growth momentum.
Technical Fit with the Minervini Trend Template
The center of Minervini's strategy is his Trend Template, a group of fixed technical rules made to filter for stocks in a verified Stage 2 uptrend. A study of CPSH's chart and technical information indicates it fits with many of these main ideas:
- Price Above Main Moving Averages: The stock's present price trades well above its 50-day ($4.33), 150-day ($4.00), and 200-day ($3.75) simple moving averages (SMAs). This layered arrangement is a standard sign of a sound, multi-timeframe uptrend.
- Positive Moving Average Directions: Importantly, these moving averages are not just price points but are themselves moving higher. The increasing 200-day SMA, specifically, confirms a good long-term trend, a main part of the template which requires this average to be in an uptrend for at least one month.
- Nearness to Highs: A main Minervini rule is to concentrate on firmness, not softness. CPSH's price is now within 25% of its 52-week high of $6.85, meeting the template's need. At the same time, it sits more than 30% above its 52-week low of $1.43, showing a major recovery or advance is already established.
- Better Relative Strength: Maybe most convincing is the stock's ChartMill Relative Strength (CRS) score of 96.56. This means CPSH is doing better than about 97% of all stocks in the market over the past year. Minervini strongly notes that real market leaders show high relative strength, often looking for scores above 70, and ideally in the 80s or 90s.
This technical outline shows a stock that is not only increasing, but doing so with confidence and leadership compared to the wider market. The template's goal is to prevent basing choices on delayed or damaged charts, and CPSH's present setup passes this first technical check.
Fundamentals and High-Growth Momentum
While the Trend Template makes sure a stock is in the correct technical place, the "High Growth Momentum" part of the search looks into the fundamental driver that could push future results. CPS Technologies, a supplier of advanced material answers for areas like aerospace, defense, and energy, displays several signs of speeding operational performance:
- Strong Earnings Growth: The company's earnings per share (EPS) growth on a trailing twelve-month (TTM) basis is over 113%. More significantly, recent three-month momentum is firm, with the last reported quarter showing year-over-year EPS growth of 101%. This design of high-double and triple-digit three-month EPS growth in recent times is exactly the type of speeding profitability that growth investors look for.
- Solid Sales Increase: Top-line growth is also notable. Revenue growth on a TTM basis is more than 54%, and recent quarters have shown firm jumps, including a 107% rise in the quarter before the last. This shows growing demand for the company's goods and services.
- Getting Better Profitability: The company's profit margin in the last reported quarter was about 15.4%, a major gain from the low-single-digit margins seen in earlier quarters. A growing margin suggests not just more sales, but more effective operations and greater price control, which can greatly increase earnings growth.
These fundamental measures are important because, as Minervini's strategy points out, the largest stock market winners are nearly always backed by firm and speeding earnings and sales growth before their most notable price moves. The "High Growth Momentum" score tries to measure this activity, and CPSH's basic numbers give the factual proof for its inclusion.
Technical Condition and Present Setup
Beyond the exact Trend Template rules, a wider look at CPSH's technical condition through ChartMill's own analysis shows a stock in a leading position, though one that may need waiting for a best entry. The platform gives CPSH a complete Technical Rating of 10 out of 10, noting its steady performance across both short and long-term periods and its place as a top-level performer compared to the whole market.
However, the analysis also gives a note of care for traders looking for a specific, low-risk entry point. The Setup Quality Rating is now a 3, showing that recent price movement has been changeable. The summary suggests that while the technical base is very good, the stock may gain from a time of settling to form a clearer support level and a more defined breakout point. For investors, this highlights the importance of method: a growth-focused investor might be okay with the firm trend, while a tactical trader might wait for a steadier, lower-changeability pattern to develop before putting in money.
You can study the full, detailed technical breakdown for CPSH on its dedicated technical analysis report page.
Locating Like Opportunities
CPSH was found through a systematic search that combines Minervini's strict Trend Template with a filter for high fundamental growth momentum. This method is made to sort the market for stocks that are both technically good and fundamentally speeding. For investors curious in finding other companies that now meet this two-part set of rules, the search is open to the public.
You can see the present results and run this "High Growth Momentum + Trend Template" search yourself by following this link: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for information and learning only. It is not a suggestion to buy or sell any security. The analysis is based on given information and certain method structures, but past performance is not a guide for future results. Investors should do their own complete study and think about their personal money situation and risk comfort before making any investment choices. Please read our full disclaimer here.