In the search for returns that exceed the market, many investors use systematic plans that join strict technical and fundamental study. One highly regarded structure is the SEPA (Specific Entry Point Analysis) method created by Mark Minervini, a two-time U.S. Investing Champion. This plan is made to find leading stocks early in large price increases by sorting for companies showing strong earnings momentum, high sales growth, and excellent technical condition. A central part is the Minervini Trend Template, a list of technical rules that confirms a stock is in a clear, strong uptrend. When this technical condition is combined with outstanding fundamental growth, often sorted for using measures like ChartMill's High Growth Momentum (HGM) score, the outcome is a short list of candidates ready for possible leadership.
Nextracker Inc. (NASDAQ:NXT) offers integrated solar tracker and software solutions for utility-scale solar projects. As a company that became public in early 2023, it works in the high-growth renewable energy infrastructure field. A recent filter joining the Minervini Trend Template with a high Growth Momentum filter has marked NXT as a stock that justifies further study from growth-focused investors.
Technical Condition: Matching the Minervini Trend Template
The Minervini Trend Template is not a loose guide but a fixed group of rules. Its goal is to remove all but the strongest stocks, making sure an investor only reviews equities that are in a clear, institution-led Stage 2 advance. For NXT, a review of the main rules shows a strong technical image.
- Moving Average Arrangement: The stock's price must trade above its 150-day and 200-day simple moving averages (SMAs), with these longer-term averages themselves moving upward. NXT's current price of $100.24 rests well above its rising 150-day SMA ($76.58) and 200-day SMA ($69.32). Also, the shorter-term 50-day SMA ($92.37) is above both the 150-day and 200-day SMAs, confirming the bullish arrangement across time periods that Minervini requires.
- Nearness to Highs: The template needs a stock to be within 25% of its 52-week high while also being at least 30% above its 52-week low. This centers the plan on strength, not bargain searching. NXT meets this easily, trading just 11% below its 52-week high of $112.74 and a notable 178% above its 52-week low of $36.06.
- Better Relative Strength: Maybe most important is relative strength (RS), which checks a stock's performance against the wider market. Minervini looks for stocks with an RS ranking above 70, with leaders often in the 80s or 90s. NXT has a ChartMill Relative Strength of 95.03, meaning it has done better than 95% of all stocks over the past year. This is a sign of a real market leader.
This combination of factors—a price above all key rising averages, leadership near new highs, and top relative strength—means NXT satisfies the Minervini Trend Template completely. It shows that the stock is under steady accumulation and is in a clear long-term uptrend.
Fundamental Momentum: The Driver for High Growth
While the Trend Template finds the "how" of a stock's price movement, the "why" is often seen in its fundamental results. Minervini's plan strongly focuses on earnings and sales speed, as these are the reasons that draw institutional money and push lasting price gains. This is where the High Growth Momentum (HGM) filter adds a key level of study.
- Earnings Condition and Speed: NXT shows solid profitability with a trailing twelve-month (TTM) EPS of $4.67, showing year-over-year growth of over 22%. More importantly, recent quarterly patterns show speeding up. The last reported quarter saw EPS increase 42.4% year-over-year, a large rise from the 7.3% growth seen three quarters before. This pattern of improving growth rates is a key signal Minervini searches for.
- Steady Earnings Surprises: A sign of a real growth company is regularly beating expectations. NXT has exceeded analyst EPS estimates in each of the last four quarters, with an average surprise of a notable 32.1%. This repeated better performance builds trust and often leads analysts to raise future estimates, creating a positive cycle.
- Growing Profitability on Increasing Sales: The company is not just growing revenue, it is becoming more profitable while doing so. Revenue growth stays high at over 20% year-over-year (TTM), with the last quarter rising higher by 42.4%. Importantly, the company's profit margin has grown significantly, from 12.25% in the prior fiscal year to 17.21% in the last reported year. This mix of top-line growth and margin growth is a strong force for bottom-line earnings and shareholder value.
- High Free Cash Flow: For a capital-heavy industry, NXT's free cash flow production is notable. TTM free cash flow per share is $4.07, showing near-doubling year-over-year growth of 98.1%. This high cash flow gives financial room and confirms the quality of its earnings.
Technical Condition and Setup Review
Beyond the fixed Trend Template rules, a wider technical study gives background for possible entry. According to ChartMill's automated technical report, NXT gets a complete technical score of 10/10, showing its excellent trend condition and market-leading performance. Both its long-term and short-term trends are scored as positive, and it continues to do better than 95% of the market and 87% of its peers in the Electrical Equipment industry.
The report states, however, that the stock's setup score is now a 5/10. This shows that while the stock is technically excellent, its recent price movement has been changeable, making a good, low-risk entry point less obvious at this time. The stock is trading near the high of its recent one-month range ($84.61 - $102.11). For investors following a strict plan like Minervini's, this suggests waiting could be needed, looking for a constructive pause or drop to a set support area, such as the zone between $90.09 and $92.37 where several moving averages and trendlines meet, before reviewing a new position.
You can review the full, detailed technical breakdown for NXT here: ChartMill Technical Analysis Report for NXT.
Conclusion
Nextracker Inc. shows a strong example of a stock that matches the ideas of high-growth, momentum-based investing. It meets the strict technical checklist of the Minervini Trend Template, confirming it is in a strong, steady uptrend led by institutional buying. Fundamentally, it shows the signs Minervini looks for: speeding earnings, steady positive surprises, growing profit margins on high sales growth, and strong cash production. This joining of technical condition and fundamental momentum is exactly what plans like SEPA try to find.
For investors looking for other candidates that meet this mix of high-growth fundamentals and perfect technical trends, the filtering process that marked NXT can be repeated. You can find more possible ideas by reviewing the "High Growth Momentum + Trend Template" screen on ChartMill.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on data provided and certain screening methodologies. All investing 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. Please read our full disclaimer here.
