Does EXELIXIS INC (NASDAQ:EXEL) align with Mark Minervini’s trading strategy?

In this article we will dive into EXELIXIS INC (NASDAQ:EXEL) as a possible candidate for growth investing. Investors should always do their own research, but we noticed EXELIXIS INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

A Technical Analysis using the Minervini Trend Template.

EXEL checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Unpacking EXEL's High Growth Momentum Rating

To evaluate a stock's growth potential, ChartMill utilizes a High Growth Momentum Rating (HGM) on a scale of 0 to 10. This assessment considers various growth and profitability aspects, like EPS and revenue growth, accelleration, surprises and revisions. EXEL has achieved a 6 out of 10:

Earnings Momentum

• The recent financial report of EXEL demonstrates a 77.78% increase in quarterly earnings compared to the previous quarter. This growth indicates positive momentum in the company's financials and suggests a promising upward trend
• EXEL has achieved 189.0% growth in EPS over the past 12 months, reflecting a sustained improvement in earnings performance.
• The 3-year EPS growth of EXEL (37.61%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• EXEL has demonstrated strong q2q revenue growth of 18.16%, suggesting a favorable trend in the company's financials and indicating the potential for continued expansion.
• Accelerating Sales growth for EXEL: the current Q2Q growth of 18.16% exceeds the previous quarter Q2Q growth of 14.33%.
• With a track record of beating EPS estimates 3 times in the last 4 quarters, EXEL showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Profitability & Financial Strength

• With a favorable trend in its operating margin over the past year, EXEL demonstrates its ability to enhance profitability through efficient operations. This growth reflects the company's focus on optimizing its cost structure.
• EXEL has experienced growth in its profit margin over the past year, reflecting improved operational performance.
• With a favorable trend in its free cash flow (FCF) over the past year, EXEL demonstrates its ability to generate robust cash flows and maintain financial stability. This growth reflects the company's focus on efficient capital allocation and cash management.
• EXEL demonstrates a strong Return on Equity(ROE) of 23.23%. This indicates the company's ability to generate favorable returns for shareholders and reflects its efficient utilization of capital. EXELIXIS INC shows promising potential for continued success.
• EXEL maintains a healthy Debt-to-Equity ratio of 0.0. This indicates the company's conservative capital structure and signifies its ability to effectively manage debt obligations while maintaining a strong equity position.

Market Strength & Institutional Confidence

• With institutional shareholders at 91.92%, EXEL demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• EXEL has maintained a healthy Relative Strength (RS) over the analyzed period, with a current 95.09 rating. This demonstrates the stock's ability to outperform its peers and indicates its competitive positioning.

How does the Setup look for EXEL

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. EXEL scores a 8 out of 10:

EXEL has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 38.69. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 36.55, a Stop Loss order could be placed below this zone.

Check the latest full technical report of EXEL for a complete technical analysis.

Concluding

More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.