Intercorp Financial Services (NYSE:IFS) has recently appeared through a screening method that joins Mark Minervini's strict Trend Template with a High Growth Momentum filter. This two-part method aims to find stocks that are not only in strong technical uptrends but are also supported by outstanding fundamental growth traits. The method favors stocks showing leadership through price momentum and relative strength, while also requiring proof of quickening earnings and sales growth, a sign of companies with major growth potential.
Meeting the Minervini Trend Template
A central idea of the Minervini method is to invest in the direction of the current trend, concentrating on stocks that are already showing strength instead of trying to find lows. The Trend Template gives a structured list to confirm a stock is in a verified, lasting uptrend. Intercorp Financial Services presently meets these important technical conditions, placing it in the desired "Stage 2" advance phase.
Key technical matches for IFS include:
- Price Above Key Moving Averages: The present price trades well above the rising 50-day, 150-day, and 200-day simple moving averages. This order confirms that short, intermediate, and long-term trends are all positive.
- Moving Average Stack: The 50-day SMA ($41.09) is above the 150-day SMA ($37.52), which is above the 200-day SMA ($36.19). This ordered, rising arrangement is a standard sign of a sound, strong uptrend.
- Proximity to Highs: The stock is trading within 4% of its 52-week high of $43.67 and is a notable 57% above its 52-week low. Minervini's approach stresses that strength leads to more strength, and leaders are often found close to new highs.
- Superior Relative Strength: With a Relative Strength (RS) rating of 89.75, IFS is doing better than almost 90% of all stocks in the market. High relative strength is a required feature for market leaders, showing institutional buying and better performance.
Qualifying as a High-Growth Candidate
Beyond a clean chart, the Minervini method puts a strong focus on fundamental acceleration. The "High Growth Momentum" rating assesses a company's earnings and sales path, and Intercorp Financial Services shows the high-growth character that can support continued price gains.
The company's fundamental standing is noted by several strong data points:
- High Earnings Growth: The latest quarter saw earnings per share jump by 317% compared to the same quarter last year. This comes after a pattern of strong earnings beats, with the company surpassing analyst predictions in each of the past four quarters by an average of almost 22%.
- Strong Sales Momentum: Revenue growth for the last quarter was a notable 247% year-over-year, showing good top-line growth and market need for its services.
- Improving Profitability: The company's profit margin in the last reported quarter grew to 31.45%, up greatly from 23.41% three quarters before. Growing margins often show pricing control and operational effectiveness, which are important for continued growth.
- Positive Analyst Revisions: Analysts have raised their earnings estimates for the next fiscal year by 6.76% over the past three months, showing increasing belief in the company's future outlook.
Technical Health and Setup Assessment
According to the detailed ChartMill Technical Report, Intercorp Financial Services receives a complete technical rating of 10 out of 10. This score shows its sound long-term positive trend, better performance within its industry (doing better than 95% of other banking stocks), and leadership position as it trades near 52-week highs while the wider market is not. The report notes several key support levels below the present price, which can act as reasonable areas for risk management.
It is important to note, however, that the report gives a lower setup quality rating. This shows that while the stock's long-term health is very good, its recent price action has been a bit unstable, making a perfect, low-risk entry point less obvious at this exact time. For traders following the Minervini method strictly, this may indicate a time of careful watching for the stock to settle and form a more clear volatility contraction pattern (VCP) before a new breakout happens.
Discovering Similar Opportunities
The mix of sound trend forces and high-growth fundamentals makes Intercorp Financial Services a strong candidate for more study. For investors looking for other companies that match this specific profile, the screening process that found IFS can be copied.
You can find more stocks that meet the 'High Growth Momentum + Trend Template' criteria by using this pre-defined screen on ChartMill.
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. Past performance is not indicative of future results.
