For investors looking to join strict technical rules with a focus on fundamental growth, the methods made popular by Mark Minervini offer a strong framework. This method rests on two main parts: the Trend Template, which finds stocks in strong, confirmed uptrends, and a detailed study of earnings and sales momentum to find companies with improving business results. The aim is to find market leaders early in their big price increases, where the combination of good price movement and better fundamentals makes a likely situation for large profits.
A recent filter made to find such chances, which uses Minervini's Trend Template with a special High Growth Momentum (HGM) score, has identified Liquidia Corp (NASDAQ:LQDA) as a candidate for more review.
Meeting the Minervini Trend Template
Minervini’s Trend Template is a fixed technical list made to sort for stocks showing clear strength and institutional support. LQDA currently meets these important technical requirements, which are basic to the method as they help steer clear of poor or falling stocks and concentrate money on market leaders.
- Price Above Key Moving Averages: The stock is trading well above its rising 50-day ($35.29), 150-day ($26.83), and 200-day ($23.92) simple moving averages. This layered order confirms a strong uptrend across several time periods.
- Moving Average Order: The shorter 50-day moving average is above both the 150-day and 200-day averages, and the 150-day is above the 200-day. This positive order shows continued and increasing buying pressure.
- Nearness to Highs: With a current price of $44.21, LQDA is trading within 1.5% of its 52-week high of $44.85, meeting the template's need to be within 25% of the high. It is also a large 293% above its 52-week low of $11.26, showing great recovery and momentum.
- Better Relative Strength: A ChartMill Relative Strength (CRS) score of 98.01 shows LQDA is doing better than 98% of all stocks in the market over the past year. This outstanding relative strength is a sign of real market leadership, a required idea of the Minervini view.
Qualifying as a High-Growth Candidate
While the Trend Template makes sure a stock is technically healthy, the High Growth Momentum part of the filter tries to find the fundamental "engine" pushing that price performance. LQDA’s basic business numbers show a story of fast growth and notable analyst confidence, main forces for momentum investors.
- Outstanding Revenue Speed: The company is showing notable top-line growth. Quarterly revenue grew over 1,121% year-over-year in the newest quarter. Also, analysts have greatly increased their forecasts, with the average revenue guess for the next year raised higher by 108.5% over the last three months.
- Earnings Momentum and Changes: Although the company is not yet profitable on a net basis (EPS TTM: -$1.44), it is showing major improvement. The last quarter showed an 86.7% year-over-year improvement in EPS. More importantly, analyst feeling is becoming clearly positive, with EPS guesses for the next year being raised higher by 52% in the last three months. Such strong upward changes often come before notable institutional buying.
- Strong Estimate Beats: The company has a past of beating forecasts, beating revenue guesses in two of the last four quarters by an average of over 63%. This history of doing better than expected builds trust and can support more positive feeling.
Technical Health and Setup Review
According to ChartMill’s detailed technical report, LQDA gets a perfect technical score of 10 out of 10, reflecting its strong and steady uptrend across both short and long-term periods. The report states the stock is a top performer, not just in the whole market but also inside its pharmaceuticals industry, doing better than 90% of its peers. Making new 52-week highs while the wider market has difficulty adds to its leadership claims.
However, the report also gives a word of warning for traders looking for a quick entry. While the technical health is "excellent," the current setup quality is scored a 4. The study suggests price movement has been "a little bit too volatile to find a nice entry and exit point" and that it "is probably a good idea to wait for a consolidation first." This points out the difference between finding a strong stock and choosing a best, low-risk entry, a key part of risk control in the Minervini method. You can see the full technical review here: LQDA Technical Analysis Report.
A Candidate for More Review
Liquidia Corp presents a strong example of a stock that fits with the ideas of growth momentum investing backed by healthy technical strength. It meets the strict requirements of the Minervini Trend Template, confirming a strong uptrend and market leadership. Fundamentally, it shows the kind of fast revenue growth and positive analyst change momentum that high-growth investors look for.
For investors wanting to look at other stocks that pass this combined filter for technical trend and high-growth momentum, you can find more possible candidates here: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis is based on data provided and certain screening methodologies. Investing in stocks involves risk, including the potential loss of principal. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
