Lumentum Holdings Inc (NASDAQ:LITE) has become an interesting option for investors using systematic growth methods, joining firm technical momentum with quickening fundamental results. The stock was recently found through a screening process that joins Mark Minervini's Trend Template with high growth momentum standards, forming a two-part method that finds companies showing both price firmness and basic business quickening.
Technical Firmness and Trend Template Agreement
Lumentum shows clear features of a stock in a firm uptrend, fitting the strict standards of Minervini's Trend Template. This systematic method focuses on stocks already in clear upward moves instead of trying to guess turning points, concentrating on securities where both near-term and long-term momentum agree positively.
The present technical view shows firm agreement across several time periods:
- Present price ($188.36) trades well over all main moving averages (50-day: $163.27, 150-day: $110.93, 200-day: $101.79)
- All moving averages show upward slopes, confirming continued buying interest
- The 50-day SMA sits well over both the 150-day and 200-day averages
- Price position shows firmness at 78% over its 52-week low while staying within 12% of its 52-week high
- Relative strength ranking of 96.55 shows better performance against almost all market friends
This technical setup meets the main Minervini idea of trading in the direction of set trends instead of trying to guess changes. The moving average agreement specifically makes sure the stock keeps momentum across near, medium, and long-term time periods, lowering the chance of false breakouts.
Fundamental Quickening and Growth Measures
Beyond technical firmness, Lumentum shows the fundamental quickening that high growth investors look for. The company's recent results show marked betterment across main financial measures, especially in earnings growth and revenue increase.
The earnings path shows important momentum:
- Last quarter EPS growth of 1,366.67% year-over-year
- Last twelve-month EPS growth of 100.98%
- Four straight quarters of earnings surprises, averaging 19.06% over guesses
- Forward guesses showing upward changes, with next-year EPS guesses rising 19.13% over three months
Revenue results complete the earnings story:
- Last quarter revenue growth of 55.92% year-over-year
- TTM revenue growth of 21.03%
- Firm forward revenue guidance with next-quarter guesses planning 59.06% growth
Profitability measures show notable betterment, with the last quarter giving a 44.37% profit margin – a large increase from the full-year margin of 1.57% reported before. This margin increase suggests operational leverage and pricing ability, both signs of companies in quickening growth stages.
Industry Place and Market Leadership
Inside the communications equipment sector, Lumentum shows clear leadership features, doing better than 78% of industry friends. The company's focus on optical and photonic products places it at the meeting point of several growth directions, including cloud infrastructure increase, data center connection answers, and new AI/ML uses.
The industrial technology part, having different laser technologies, speaks to several end-markets and gives spread beyond communications. This two-part method lets Lumentum benefit from growth across both cloud networking and industrial automation directions.
Technical Review Summary
According to ChartMill's full technical study, Lumentum gets a perfect technical score of 10 out of 10, showing special firmness across all checked measures. The report notes steady results in both recent history and over the last year, with the stock showing leadership features. While the technical base stays firm, the study shows present price action may be too changeable for perfect entry placement, suggesting investors watch for consolidation shapes before making new positions.
Detailed technical analysis available here
Investment Points
For investors following systematic growth methods, Lumentum offers an interesting case study in agreed technical and fundamental momentum. The stock meets both the trend-following ideas of the Minervini method and the quickening standards looked for by growth investors. The joining of moving average agreement, firm relative strength, earnings quickening, and revenue growth forms a multi-sided growth story.
As with any growth investment, correct position size and risk control stay very important. The stock's higher changeability, as shown in its 13.64 average true range, needs careful stop-loss placement and position size to handle possible drawdowns while taking part in the continuing uptrend.
Finding Like Chances
For investors looking for more options that meet like growth and momentum standards, the screening method that found Lumentum can be used to find other possible chances. This screening approach joins Minervini's trend standards with high growth momentum scores, giving a systematic way to find companies showing both technical firmness and fundamental quickening.
Disclaimer: This study is for information and learning only and does not form investment advice. Investors should do their own study and talk with money advisors before making investment choices. Past results do not promise future results, and all investments have risk including possible loss of main money.
