Evaluating LPL FINANCIAL HOLDINGS INC (NASDAQ:LPLA) using Mark Minervini’s winning stock formula

Our stock screener has spotted LPL FINANCIAL HOLDINGS INC (NASDAQ:LPLA) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

Minervini Trend Template Analysis.

LPLA checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

ChartMill's Evaluation of Growth

ChartMill assigns a High Growth Momentum Rating (HGM) to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth and profitability elements, including EPS and revenue growth, accelleration, surprises and revisions. In the case of LPLA, the assigned 4 reflects its growth potential:

Explosive Earnings Growth

• The EPS of LPLA has exhibited growth from one quarter to another (Q2Q), with a 22.33% increase. This underscores the company's ability to generate higher earnings and improve its financial standing.
• The earnings per share (EPS) growth of LPLA is accelerating: the current Q2Q growth of 22.33% is above the previous quarter Q2Q growth of 21.08%. Earnings momentum and acceleration are key for high growth systems.
• EPS growth accelerated for 3 quarters in a row.
• The EPS of LPLA has shown consistent growth over a 3-year period, indicating the company's ability to generate increasing earnings over time.
• LPLA has experienced 30.29% q2q revenue growth, indicating a significant sales increase.
• With notable 1-year revenue growth of 23.2%, LPLA exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for future growth.
• LPLA has consistently surpassed EPS estimates in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.

Financial Strength & Profitability

• With a solid Return on Equity (ROE) of 36.12%, LPLA exemplifies its ability to generate favorable returns on shareholder investments. This metric demonstrates the company's commitment to maximizing shareholder value.
• With a current Debt-to-Equity ratio at 1.91, LPLA showcases its disciplined capital structure. The company's prudent management of debt obligations contributes to its financial stability and long-term sustainability.

Strong Market Performance

• The Relative Strength (RS) of LPLA has consistently been strong, with a current 83.55 rating. This indicates the stock's ability to exhibit relative price outperformance and reflects its competitive strength.

How do we evaluate the setup for LPLA?

ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. LPLA currently has a 3 as setup rating:

LPLA has an average technical rating and it also does not offer a high quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

For an up to date full technical analysis you can check the technical report of LPLA

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More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.