DT MIDSTREAM INC (NYSE:DTM) Emerges as a High-Growth Momentum Stock

DT MIDSTREAM INC (NYSE:DTM) has appeared as a notable option for investors using a systematic method for growth investing. The stock recently appeared through a screening process that joins Mark Minervini's strict Trend Template with a High Growth Momentum (HGM) score, a two-part plan created to find companies displaying both solid technical momentum and sound fundamental growth traits. This process aims to find stocks in clear upward moves, thus taking part in their momentum, while also making sure the basic business shows improving financial results that can support additional price gains.

Meeting the Minervini Trend Template

A central idea of the Minervini plan is to invest in stocks that are already in a clear, confirmed upward move, steering clear of the problems of trying to buy a declining stock. The Trend Template gives a particular group of technical conditions to clearly outline such a move. DT Midstream fits well with these needs, indicating that buyer interest is dominant across different time periods.

The stock's present price behavior and moving average setup are classic illustrations of a sound upward move:

• Price vs. Moving Averages: The present price of $113.30 trades well above its important moving averages, the 50-day ($109.98), 150-day ($105.18), and 200-day ($103.03). This order is a main screen in the Trend Template, verifying the stock is in a positive market stage.
• Trending Averages: Importantly, these moving averages are not just being approached but are themselves in upward moves. The 200-day moving average, for example, has moved up from a prior value of $102.97, showing continued long-term buyer activity.
• Momentum Order: The 50-day moving average sits above both the 150-day and 200-day averages, a setup that signals increasing intermediate-term momentum.
• Proximity to Highs: DTM is trading within 3% of its 52-week high of $116.47 and is a notable 36% above its 52-week low of $83.30. Minervini’s thinking stresses that strength leads to more strength, and leading stocks often reach new highs. The stock’s high relative strength rank of 73.5 further verifies it is doing better than a large part of the market.

Fundamentals for High Growth Momentum

While the Trend Template finds the "when" to invest from a technical view, the High Growth Momentum score evaluates the "why" from a fundamental view. A high HGM score implies a company is not just expanding, but that its expansion is speeding up and being acknowledged by the market. DT Midstream displays several fundamental features that support such a score.

The company's recent financial reports show a marked increase in important performance measures:

• Earnings Increase: After a time of variation, quarterly earnings expansion has improved notably. The most recent quarter displayed a year-over-year EPS expansion of 25.6%, a clear gain from the 6.1% and 7.1% expansion seen in the two earlier quarters.
• Sound Sales Expansion: Revenue expansion is solid and steady, with the last quarter rising 26.6% compared to the same time last year. This follows the firm expansion of 26.6% and 26.3% in the two previous quarters, showing a continued upward path in the company's top line.
• Profitability and Cash Flow: The company keeps good profit margins, with the last quarter at 36.6%. More noticeably, free cash flow per share has grown greatly, showing expansion of 2,250% over the past year, rising to $4.66 per share. This shows solid operational effectiveness and financial condition.
• Analyst View: The fundamental account seems to be getting acknowledgment, as shown by a 1.6% upward change to next year's revenue projections from analysts over the past three months.

These elements together create an image of a company going through a clear fundamental improvement, supplying the necessary support that can maintain a technical price rise and push the stock to new highs.

Technical Health Overview

The full technical study report for DT Midstream gives the stock a high score of 9 out of 10, reflecting its very good technical condition. The report states that both long-term and short-term moves are positive, and the stock is presently trading near a new 52-week high. While the overall technical image is sound, the study does show that the immediate setup condition is not perfect for a new purchase, as recent price action has been a bit unstable. For investors following a Minervini-type method, this indicates that the stock is a solid keep for current holdings but might need a time of settling to offer a calmer entry point for new money.

A full list of the support and resistance points, with the entire study, is present in the complete technical report for DTM.

Finding Similar Opportunities

The screening method that found DT Midstream can be a useful instrument for investors looking to organize their search for stocks with high potential. By joining strict technical screens with fundamental expansion numbers, this method helps reduce the group of thousands of stocks down to a short list of possible options.

For those curious to find other stocks that presently meet these "High Growth Momentum + Trend Template" conditions, you can view the current results using the dedicated stock screener.

Disclaimer: This analysis is for informational and educational purposes only and is not intended as investment advice. The information provided does not constitute a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer for more details.