Kiniksa Pharmaceuticals (NASDAQ:KNSA) Aligns with Minervini’s Trend Model as a Strong Momentum Pick

Kiniksa Pharmaceuticals: A Strong Momentum Pick Aligning with Minervini’s Trend Model

Mark Minervini’s trend-based strategy aims to find stocks with strong upward movement, backed by both technical and fundamental factors. His method uses a specific Trend Model, which includes moving averages and strength indicators, along with a focus on fast-growing companies with improving earnings and sales. The idea is to identify stocks early in a significant upward move while managing risk through careful timing.

Kiniksa Pharmaceuticals International Plc (NASDAQ:KNSA) stands out as a potential fit for this approach, meeting Minervini’s technical requirements while also showing signs of rapid growth. Here’s why KNSA matches this strategy.

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How KNSA Fits the Minervini Trend Model

Minervini’s Trend Model demands stocks meet several technical conditions to confirm a strong upward trend. Here’s how KNSA measures up:

1. Price Above Important Moving Averages

   • The stock is currently at $32.95, significantly higher than its 50-day SMA ($28.44), 150-day SMA ($23.86), and 200-day SMA ($23.55).
   • This shows both short-term and long-term positive momentum.

2. Rising Moving Averages

   • The 50-day, 150-day, and 200-day SMAs are all moving upward, signaling consistent buying interest.

3. Strength Compared to Peers

   • KNSA has a ChartMill Relative Strength (CRS) score of 85.95, meaning it performs better than nearly 86% of all stocks—a key trait of leading stocks.

4. Near 52-Week High

   • The stock is trading just 0.5% below its 52-week high of $33.10, indicating strong demand.
   • It is also 85% above its 52-week low ($17.82), meeting Minervini’s rule of being at least 30% above its yearly low.

5. Confirmed Upward Trend

   • Both short-term and long-term trends are positive, reinforcing its position in a steady upward move.

These factors align with Minervini’s view that top-performing stocks show strong technical health before major gains.

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Fast-Growing Fundamentals Strengthening the Argument

Beyond technicals, Minervini looks for rapid improvement in earnings and sales. KNSA demonstrates several growth signals:

1. Sharp Earnings Growth

   • EPS Growth (Q2Q): +483% (current quarter vs. prior year).
   • EPS Growth (TTM): +125%, reflecting strong profit gains.
   • The company has exceeded EPS estimates in 2 of the last 4 quarters, with recent upward revisions (+41% for next year’s EPS estimates).

2. Sales Growth

   • Revenue Growth (Q2Q): +51.65%, with steady increases in recent quarters.
   • TTM Revenue Growth: +56.6%, showing growing market traction.

3. Better Profitability

   • Latest Quarter Profit Margin: 6.2%, up from losses in earlier periods.
   • Free Cash Flow per share has grown +14.3% YoY, a positive sign for long-term stability.

These metrics suggest KNSA is in a phase of rapid growth, a key feature of Minervini’s top picks.

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Technical Overview

ChartMill’s technical report gives KNSA a score of 9/10, highlighting:

• Strong upward trends in both short and long-term periods.
• A relative strength rank in the top 15% of stocks.
• Recent price strength, though the report notes the stock may be overbought short-term, suggesting a pullback could provide a better buying opportunity.

Key support levels to monitor include:

• $28.40–$29.07 (a mix of moving averages and trendlines).
• $26.97 (daily trendline support).

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Finding Similar Fast-Growth Momentum Stocks

For investors looking for more stocks that fit Minervini’s growth and momentum criteria, our High Growth Momentum + Trend Model Screen offers a selected list of candidates meeting these strict filters.

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Closing Remarks
Kiniksa Pharmaceuticals makes a strong case for growth investors following Minervini’s approach. Its solid technical setup, paired with improving fundamentals, positions it as a potential standout in the biopharmaceutical sector. However, as with any momentum strategy, managing risk is essential—waiting for a pullback or consolidation could offer a more balanced entry point.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research or consult a financial advisor before making investment decisions.