Hecla Mining Co. (NYSE:HL) Fits the Minervini SEPA Strategy for High Growth Momentum

For investors looking to join strong growth with a structured trend method, the system created by Mark Minervini offers a notable framework. This method, called the Specific Entry Point Analysis (SEPA) strategy, methodically finds market leaders by mixing strict technical and fundamental filters. The technical base is the "Trend Template," a list confirming a stock is in a strong, confirmed uptrend. This is then combined with a hunt for strong fundamental momentum, companies showing speeding earnings, rising revenues, and growing profit margins. The aim is to locate stocks that are not only increasing, but are being pushed higher by outstanding core business results, placing them for possible major gains.

Hecla Mining Co. (NYSE:HL) stands as a present example that seems to fit this two-part strategy closely. As a top silver and gold producer with work in North America, the company is moving with a strong wave in the precious metals sector. A close study of its technical state and fundamental condition indicates it deserves more attention from growth-focused investors using a Minervini-style filter.

A Clear Trend Template Arrangement

The Minervini Trend Template is made to filter out all but the soundest technical arrangements, requiring discipline by overlooking stocks that do not pass any single rule. Hecla Mining presently satisfies these strict technical needs, indicating a sound and continuing uptrend.

• Moving Average Arrangement: The stock's price is trading notably above its important moving averages (50-day, 150-day, and 200-day), and these averages are ordered in the preferred bullish order: the 50-day is above the 150-day, which is above the 200-day. Also, both the 150-day and 200-day moving averages have a clear upward angle, confirming lasting strength.
• Nearness to Highs: A central Minervini idea is to concentrate on strength, not weakness. HL's present price is not only more than 30% above its 52-week low, it has recently reached a new 52-week high and is trading within 2% of that top. This action shows the stock is in a leading spot, not bouncing back from a large drop.
• Better Relative Strength: Maybe most significant is HL's notable relative strength (RS) ranking of 99.12. This means the stock is doing better than almost 99% of the whole market over the past year. In the Minervini view, high relative strength is a sign of real market leadership, often pointing to institutional buying and a greater chance of continued better performance.

This combination of technical elements creates an image of a stock in a strong "Stage 2" climb, the exact period where Minervini aims to invest.

Fundamentals Driving the Movement

While a sound chart is necessary, the Minervini strategy requires that technical strength be confirmed by outstanding fundamental growth. This is where the "High Growth Momentum" part of the filter is important, and Hecla's recent financial numbers are significant.

The company is showing the type of speeding profitability that growth investors look for:

• Major Earnings Growth: HL's earnings per share (EPS) growth is remarkable. Year-over-year EPS growth is at 1,300%, and the last four straight quarters have each shown three-digit growth from 200% to 300%. This sequence of steady, large acceleration is a key sign of fundamental momentum.
• Sound Revenue Growth: Top-line growth is also solid, with trailing twelve-month revenue up over 45%. Recent quarterly sales growth has been sound, marked by a 67% jump in the latest quarter.
• Getting Better Profitability: The company's profit margin has grown notably in each of the last four quarters, increasing from 4.7% to 24.6%. This direction of growing margins suggests operational efficiency and pricing ability, which analysts have noted. Forward earnings guesses for the next year have been adjusted upward by over 36% in the last three months, showing increasing belief in the company's future.

This fundamental picture, marked by speeding earnings, solid sales growth, and improving margins, supplies the "force" for the technical "rise." It fits exactly with the Minervini idea that the largest stock winners are nearly always backed by strong, clear gains in the core business.

Technical Condition and Present Arrangement

According to ChartMill's own analysis, Hecla Mining receives a complete Technical Rating of 10/10, putting it in the top group of performers in the market. The report states the stock's positive long-term and short-term directions, its leader status (doing better than 99% of all stocks and 96% of its Metals & Mining industry group), and its recent move to a new 52-week high.

However, the analysis also gives a point of warning related to entry timing. The Setup Quality rating is now low (1/10), showing that after its strong move, the stock is "stretched" and not in a direct consolidation shape preferred for a low-risk entry. The report conclusion notes that while the technical condition is very good, "it does not present a decent entry opportunity at the moment. Prices have been extended to the upside lately. For a nice entry, it is better to wait for a consolidation."

This points out a vital part of the strategy: finding a strong example is only the first step. The Minervini method then needs patience to wait for a particular, low-risk entry point, often through a volatility contraction pattern (VCP), to improve the possible reward-to-risk ratio.

You can examine the full, close technical report for HL here: ChartMill Technical Analysis for HL.

Locating Comparable Chances

Hecla Mining acts as a real-world example of how the Minervini framework can identify stocks showing both strong trends and fundamental speeding. For investors wanting to find other companies that presently pass this two-part filter, the set "High Growth Momentum + Trend Template" screen is a good beginning point.

View the present results of this screen to locate more possible examples: High Growth Momentum + Trend Template Screen.

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Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, a recommendation, or an offer to buy or sell any security. The analysis is based on current data and methodologies, which are subject to change. All investing involves risk, including the potential loss of principal. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer here.