The method used to find possible investment choices joins a strict technical system with attention to fundamental growth speed. This method is based on the plan made famous by trader Mark Minervini, which aims to find stocks in strong, continuing upward movements (Stage 2) by using a fixed group of technical checks called the Trend Template. The aim is to remove weak or consolidating stocks and focus only on those showing clear market leadership through their price movement. This technical base is then combined with a review of high-growth speed, making sure the company itself is not only technically healthy but also showing speeding business fundamentals. The combination of these two views, strong price trend and strong earnings path, tries to find companies that are both market leaders and growth leaders.
Technical Strength: Aligning with the Minervini Trend Template
HEICO CORP (NYSE:HEI) presents a strong technical view that matches closely with the rules made to find stocks in a controlling uptrend. The Minervini Trend Template needs a specific order of moving averages and price movement to confirm both long-term and short-term strength, and HEI fits these requirements clearly.
- Trend Alignment: The stock is trading well above all its important moving averages. The present price is above the rising 50-day, 150-day, and 200-day simple moving averages (SMAs). Importantly, the 50-day SMA is above the 150-day SMA, which is then above the 200-day SMA. This ordered arrangement is a classic sign of a sound, structured uptrend.
- Proximity to Highs: A central idea of the Minervini method is to focus on strength, not low price. HEI's price is within 3% of its 52-week high, showing it is a market leader, not a follower. At the same time, it has risen over 63% from its 52-week low, showing notable momentum is already in place.
- Relative Strength: With a ChartMill Relative Strength (CRS) rating of almost 89, HEI is doing better than most of the market. This high relative strength is a required check in the Trend Template, as it finds stocks that are wanted and leading the market higher, not just following it.
This meeting of technical points indicates HEI is securely in a Stage 2 rise, the main phase sought by the Minervini plan for catching the largest part of a stock's price gain.
Fundamental Momentum: The Engine for High Growth
While the chart shows the result, the fundamental numbers show the reason. For a stock to keep a strong trend, it usually needs the support of sound and getting better business performance. HEI’s latest financial reports show the signs of a high-growth speed company, which is needed for the trend to have a fundamental base and not be only speculative.
- Earnings Acceleration: The company has reported steadily sound and speeding earnings growth. Year-over-year EPS growth has jumped from 15.3% three years ago to more than 34% in the latest trailing twelve-month period. Even stronger is the latest quarterly speed increase, with the last two reported quarters showing growth of about 30% and 35%.
- Revenue Growth and Stability: Top-line growth is sound and steady, with recent quarterly sales rises between 15% and 19%. This shows demand for HEI's aerospace and defense products is strong, giving a firm base for profit growth.
- Estimate Beats and Margin Expansion: HEI has a flawless history of beating analyst earnings estimates over the last four quarters, with an average beat of more than 12%. Also, the company's profit margin has shown step-by-step betterment in recent quarters, rising from 14.3% to 15.6%. Growing margins on increasing sales is a strong mix that points to operational skill and pricing ability, important features of lasting growth companies.
This fundamental picture is key because, as Minervini notes, "big earnings attract big attention." Institutional investors push major trends, and they are regularly attracted to companies that show better and speeding profitability.
Technical Health and Setup Assessment
ChartMill's own analysis gives a measured summary of HEI's technical condition. The stock gets a perfect Technical Rating of 10/10, showing very good health across short-term and long-term periods. The report says the stock is in a steady uptrend and doing better than 88% of the market. Both the short-term and long-term trends are rated as good, a mix that gives a positive setting.
However, the analysis also gives a note of care for immediate entry. The Setup Quality rating is now a 3. The report says that while the technicals are very good, price movement has been "a little bit too volatile to find a nice entry and exit point," suggesting it may be wise to wait for a time of consolidation or a move back toward support before starting a new position. This points out the key difference between a great stock and a great setup; the first is found by the screen, while the second needs careful timing.
For a full breakdown of the support levels, trend study, and full technical notes, you can see the complete ChartMill Technical Report for HEI.
Finding Similar Opportunities
HEICO Corp shows the kind of choice that appears when looking for sound technical trends joined with high-growth fundamentals. Investors wanting to use this strict method to find other possible leaders can look at the preset screen that found HEI. This screen methodically uses the Minervini Trend Template checks together with a High Growth Momentum rating to search the market for similar choices.
Click here to view the current results of the High Growth Momentum + Trend Template screen.
Disclaimer: This article is for information and learning only. It does not make a suggestion to buy, sell, or keep any security, nor is it investment advice. The study is based on given data and certain methods, but past results do not show future results. Always do your own research and think about talking with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.
