Investors looking to find market leaders with high growth potential frequently use systematic methods that join technical strength with fundamental health. One method is linked to trader Mark Minervini, whose plan depends on his Specific Entry Point Analysis (SEPA) system. This process carefully selects for stocks showing strong uptrends, better relative strength, and quickening earnings and sales growth. The aim is to find companies not just joining a rally, but leading it, providing a good risk/reward scenario at a defined entry point. By using a mix of Minervini's Trend Template for technical condition and filters for strong growth momentum, we can assess if a stock like Jabil Inc (NYSE:JBL) makes a strong case for this strict growth investing method.
Technical Foundation: Following the Minervini Trend Template
The first part of the Minervini plan is confirming a stock is in a clear, strong uptrend. This is measured by the Trend Template, a group of fixed technical rules. Jabil's present chart position shows a good fit with these rules, which are made to remove weak or correcting stocks and concentrate only on those with institutional backing and clear momentum.
- Price Above Key Moving Averages: The stock's last price of $244.70 trades well above its rising 50-day ($222.29), 150-day ($217.38), and 200-day ($202.22) simple moving averages (SMAs). This ordered alignment shows continued buying pressure across all major timeframes.
- Moving Average Alignment: The 50-day SMA is above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This order confirms the trend's strength and increasing momentum, a sign of Minervini's stage 2 uptrends.
- Proximity to Highs: A central idea of the plan is to focus on strength, not low price. JBL's price is within 5% of its 52-week high of $258.05 and is 125% above its 52-week low of $108.66. This shows strong recovery and leadership.
- Superior Relative Strength: With a ChartMill Relative Strength (CRS) score of 86.81, JBL is doing better than nearly 87% of the whole market. Minervini states that real market leaders regularly show high relative strength, often above 80, meaning they are among the first stocks institutions purchase during market rises.
This technical setup indicates JBL is not only rising but is in a clear, leadership-quality uptrend, meeting the strict first stage of the SEPA process.
Fundamental Engine: The Argument for Strong Growth Momentum
While a good chart is necessary, Minervini states it must be supported by getting better fundamentals. The "high growth momentum" part of the filter looks for companies showing speeding business performance, which often acts as the reason for continued price gains. Jabil's recent financial numbers show several good trends.
- Earnings Acceleration: A main sign for Minervini is sequential quarters of growing earnings growth. JBL's year-over-year EPS growth has sped up clearly over the last four reported quarters: from 15.5%, to 34.9%, to 43.0%, and most recently to 42.5%. This sequence of rising growth rates is a strong fundamental reason that draws institutional money.
- Consistent Earnings Surprises: The company has exceeded EPS estimates in all of the last four quarters, with an average beat of 7.6%. Positive surprises often lead to higher changes in future estimates, creating a cycle of rising expectations and price momentum. Importantly, analysts have increased their next-year EPS estimates by over 7% in the last three months.
- Strong Revenue Growth: Top-line growth gives confirmation. JBL's most recent quarterly sales grew by 18.7% year-over-year, keeping a good speed from the prior quarter's 18.5% growth. This shows demand for its manufacturing solutions stays firm.
- Good Cash Generation: The company's trailing twelve-month free cash flow per share of $11.09 and its 17% year-over-year growth in FCF give financial room and confirm the quality of its earnings.
These fundamental points, speeding earnings, consistent beats, and good revenue growth, create the "story" behind the chart. They indicate the company's operations are getting stronger, providing a fundamental reason for the stock's technical breakout and high relative strength.
Synthesis: The Setup and Risk Parameters
Joining the technical and fundamental views, JBL shows a profile that matches the Minervini idea: a leader in its sector (Electronic Equipment, Instruments & Components) moving to new highs supported by speeding fundamentals. The provided technical analysis report gives JBL a high Technical Rating of 9 out of 10, confirming its good trend condition. The report states the stock is now showing a bull flag pattern, a continuation setup that can give a possible entry point after its recent jump.
The analysis also finds a clear support area between $226.14 and $230.06, made by a combination of moving averages and trendlines. For a trader using Minervini's strict risk management rules, this area would be key for placing an initial stop-loss order to set and limit risk on any new position. The complete, detailed technical breakdown, including support/resistance levels and automated trade setup situations, is in the ChartMill Technical Report for JBL.
Finding Similar Opportunities
Jabil Inc works as a real example of how the Minervini structure and growth momentum filters can meet to show possible leadership candidates. For investors wanting to search for other stocks that meet this mix of technical skill and fundamental acceleration, the preset filter that found JBL is a helpful beginning. You can view current results and change filters to your own standards via this High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on data and a specific investment methodology, but past performance is not indicative of future results. Always conduct your own due diligence, consider your risk tolerance, and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer here.
