In the search for market-leading stocks positioned for major growth, a combined method of technical and fundamental study can be a strong instrument. One orderly process for this is the Mark Minervini plan, which joins his specific Trend Template with strict fundamental checks. The Trend Template serves as a technical screen, finding stocks already in solid, confirmed uptrends by examining key moving average arrangements and relative strength. This is then combined with a concentration on high-growth momentum, looking for firms showing quickening earnings, solid sales growth, and gaining profit margins. The aim is to locate securities where strong technical momentum is supported by fundamental business health, a pairing that has in the past come before large price gains.
National Fuel Gas Co (NYSE:NFG) recently appeared through a screening process made to use these exact ideas, indicating it merits more study from growth-focused investors.
Technical Agreement with the Minervini Trend Template
A central idea of the Minervini plan is to invest in the direction of a shown trend, not to guess bottoms. The Trend Template gives a strict list to confirm a stock is in a verified Stage 2 climb. Using the given data, NFG seems to meet these important technical terms:
- Trending Price Action: The stock's last price of $91.17 trades well above its key simple moving averages (SMAs), the 50-day ($84.78), 150-day ($84.69), and 200-day ($84.68). This arrangement is a main need, showing continued buying pressure across several timeframes.
- Positive Moving Average Slopes: Importantly, all these moving averages, 50, 150, and 200-day, are in a verified uptrend. For example, the 200-day SMA has increased from a past value of $84.64 to its current $84.68. This verifies the long-term trend's condition.
- Nearness to Highs: NFG is trading within 3% of its 52-week high of $94.13, which is fully inside the Template's need of being within 25% of the high. At the same time, the current price is over 30% above its 52-week low of $69.93. This picture of being close to new highs after a notable rise is typical of leading stocks.
- Strong Relative Performance: With a ChartMill Relative Strength (CRS) score of 76.05, NFG is doing better than about 76% of the wider market. Minervini notes that the top performers often have RS scores above 70, as they are the market leaders during uptrends.
This technical view indicates NFG is not in a speculative jump but is in a steady, institutional-quality uptrend, making it a suitable subject for the next step of study.
Fundamental Examination for High Growth Momentum
While the Trend Template finds how a stock is moving, the "High Growth Momentum" part of the screen studies why it might be moving. It searches for fundamental quickening that can draw continued institutional investment. Here, NFG's recent financial measures show several strong growth traits:
- Earnings Quickening: The firm is displaying a sequence of quickening year-over-year earnings per share (EPS) growth. The latest quarter showed growth of 24.1%, coming after quarters showing 58.4% and 65.7% growth. This successive pattern of solid, and in recent past quickening, bottom-line increase is a key feature wanted by growth investors.
- Steady Earnings Surprises: NFG has surpassed analyst EPS estimates in each of the past four quarters, with an average beat of 6.78%. This steady overperformance suggests management action is beating expectations, often a reason for upward changes and re-ratings.
- Solid Profit Margins: The company has kept good profitability, with the last stated quarterly profit margin at 27.9%. More significantly, this shows a major increase from the 23.0% margin in the earlier quarter, showing better operational efficiency or pricing ability.
- Firm Revenue Growth: Top-line growth backs the earnings story, with recent quarterly sales growth numbers of 18.6%, 25.3%, and 27.4%. This shows that earnings growth is not only from cost reduction but is pushed by rising business activity.
It is significant to state that analyst changes for next year's estimates have been negative, which is a point of care and needs watching. However, the solid stated growth path and steady beats form the center of the current high-growth momentum view.
Technical Condition and Setup Evaluation
Beyond the basic Trend Template screens, a deeper technical study of NFG shows a healthy picture. The stock receives a high ChartMill Technical Rating of 9 out of 10, reflecting very good overall technical condition with positive long-term and short-term trends. Also, it holds a good Setup Rating of 7, showing the stock is now consolidating in a narrower range after its recent climb, which can give a more clear risk/reward entry point.
The technical report mentions the creation of a bull flag shape, a pause or small drop within a solid uptrend, often seen as a continuation shape. The study finds a clear resistance area around $93.72. A clear breakout above this level could be read as a restart of the main uptrend.
You can see the full, detailed technical study for NFG here: NFG Technical Analysis Report.
Conclusion
National Fuel Gas Co presents a situation where a solid technical trend, as described by the Minervini Trend Template, lines up with a fundamental picture showing quickening earnings, increasing margins, and steady overperformance. This agreement makes it a subject for more study by investors using a growth momentum plan. The present technical setup indicates the stock is absorbing its gains, possibly preparing for its next directional move.
Interested in locating other stocks that fit this mix of high-growth fundamentals and solid technical trends? You can investigate the screening method that found NFG here: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, a recommendation, or an offer to buy or sell any security. The study is based on data given and screening methods described, which have built-in limits. You should do your own complete research, think about your financial situation, risk tolerance, and investment goals, and talk with a qualified financial advisor before making any investment decisions. Past performance is not a guide to future results.
