For investors aiming to join strict technical rules with a focus on fundamental growth, the methods made popular by Mark Minervini offer a strong framework. This method, often called the SEPA (Specific Entry Point Analysis) strategy, depends on finding stocks that are already in strong uptrends, supported by quickening earnings and sales growth. The aim is not to buy a declining asset but to join an advance that has already started and is increasing its pace. The strategy uses a firm "Trend Template" to sort for technically sound stocks showing high relative strength and steady price movement, while fundamental filters find companies with the fast growth traits that usually support continued price gains.
A recent filter made to find such chances, joining Minervini's Trend Template with a High Growth Momentum (HGM) rating filter, has pointed to Globus Medical Inc - A (NYSE:GMED) as a candidate worth more study.
Technical Base: Following the Minervini Trend Template
The main part of Minervini's strategy is his Trend Template, a group of fixed technical rules made to confirm a stock is in a clear, long-term uptrend (Stage 2). GMED currently meets these important conditions:
- Price Above Key Moving Averages: The stock trades at $93.47, well above its rising 50-day ($87.23), 150-day ($67.98), and 200-day ($67.44) simple moving averages. This order confirms buyers are in charge across all major timeframes.
- Moving Average Order: The shorter-term 50-day MA is placed above both the 150-day and 200-day MAs, while the 150-day MA also trades above the 200-day MA. This "stacked" order is a classic sign of strong, organized momentum.
- Nearness to Highs: GMED's price is about 80% above its 52-week low of $51.79 and within 8% of its 52-week high of $101.40. Minervini states that true market leaders tend to trade close to their highs, not staying far below them.
- High Relative Strength: With a ChartMill Relative Strength (CRS) score of 87.12, GMED is doing better than nearly 90% of the whole market. High relative strength is a sign of institutional buying and a key signal of future leadership.
This technical view meets Minervini's main rule: trade in the direction of the set trend. By sorting for these features, the strategy methodically avoids stocks in resting or falling phases, focusing capital on stocks showing confirmed strength.
Fundamental Driver: Meeting the Standard as a High-Growth Candidate
A strong chart is needed but not enough. The biggest stock moves are almost always powered by outstanding business results. The "High Growth Momentum" part of the filter looks for companies showing a quickening in key financial numbers. GMED's recent fundamentals suggest it has this growth driver:
- Strong Earnings Growth: The company's Trailing Twelve Month (TTM) EPS sits at $3.56, showing year-over-year growth of about 23%. More notably, the most recent quarterly EPS rose 42.2% compared to the same quarter last year, pointing to possible quickening.
- Solid Sales Increase: Revenue growth is also notable, with TTM sales up nearly 12% year-over-year. The latest quarter saw revenue grow 22.9%, showing the company's ability to increase its top line greatly.
- Positive Analyst Changes: Maybe one of the most clear signals for growth investors is upward changes in future estimates. Analysts have increased their average EPS estimate for the next fiscal year by 18.3% over the last three months, showing growing belief in the company's profit path.
- Earnings Surprise Record: GMED has beaten consensus EPS estimates in three of the last four quarters, with an average beat of nearly 15%. Steady positive surprises often act as triggers, surprising the market and leading to institutional re-evaluations.
This mix of strong technicals and quickening fundamentals creates the "trigger" Minervini describes within the SEPA framework. The improving earnings profile gives a fundamental reason for the stock's strength and a foundation for thinking the uptrend can persist.
Consolidation and Setup Condition
While GMED's long-term trend is clearly positive, the most careful entries often happen after a time of consolidation within that trend. According to ChartMill's own analysis, GMED shows a fair setup pattern. The stock's technical rating is a high 9 out of 10, but its setup rating is a 6, meaning it is consolidating after its recent rise.
The technical report states that prices have been trading in a wide range over the past month and are currently in a pullback. This action can work off overbought conditions and build a new base of support. For a strategy focused on specific entry points, such a pullback toward support levels may offer a more clear, lower-risk chance to join the set uptrend, if the stock can find support and continue its upward move.
A full breakdown of the stock's support, resistance, and possible trade setup can be found in the complete ChartMill Technical Report for GMED.
Conclusion
Globus Medical Inc shows the kind of stock the joined Minervini and high-growth momentum filtering process tries to find. It shows the disciplined technical strength demanded by the Trend Template, trading above ordered moving averages, showing high relative strength, and holding near its highs. Fundamentally, it adds to this view with strong earnings growth, sales increase, and positive analyst opinion, giving the fuel for continued momentum.
This joined method tries to reduce risk by requiring a confirmed uptrend while seeking opportunity by focusing on companies with fundamental quickening. It is a process made to find leaders, not followers.
Interested in reviewing other stocks that currently meet this mix of technical and growth rules? You can run the live filter yourself to see an updated list of possible candidates: View the High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis presented is based on current data and methods, which are subject to change. Investing in stocks involves risk, including the potential loss of principal. You should conduct your own full research and consult with a qualified financial advisor before making any investment decisions. Past performance is not a guarantee of future results.
