For investors looking to find stocks with high potential for major growth, a method that mixes technical trend study and fundamental momentum review can be a strong method. This tactic, made famous by noted trader Mark Minervini, first uses a strict "Trend Template" to sort for stocks showing solid, clear uptrends. It then adds a "High Growth Momentum" (HGM) review to confirm the basic company is showing speeding business fundamentals. This two-part method tries to find companies that are both technically sound and basically set for growth, marking them as possible picks for growth-oriented portfolios.
OR Royalties Inc (NYSE:OR) appears as a stock that now meets the rules of this combined screen, offering a strong case for more study by growth and momentum investors.
Meeting the Minervini Trend Template
Mark Minervini's Trend Template is made to find stocks in a strong Stage 2 advance, where the main trend is clearly upward. The template uses a set of firm technical checks to confirm strength across several timeframes. A look at OR's current numbers shows it passes these key rules:
- Price Above Key Averages: The stock's last price of $45.71 trades well above its rising 50-day ($37.34), 150-day ($34.03), and 200-day ($31.68) simple moving averages (SMAs). This order confirms positive momentum in both the short and long term.
- Moving Average Alignment: The 50-day SMA is above the 150-day SMA, which is above the 200-day SMA. Also, the 200-day SMA has a positive slope, having increased from a past value of $31.56. This "stacked" order of rising averages is a clear sign of a solid uptrend.
- Proximity to Highs: At $45.71, OR is trading within 4.5% of its 52-week high of $47.75 and sits about 160% above its 52-week low of $17.55. Minervini's idea stresses that real market leaders reach new highs, and staying within 25% of a high shows continued momentum, not tiredness.
- Superior Relative Strength: With a ChartMill Relative Strength (CRS) score of 96.35, OR is doing better than 96% of all stocks in the market over the past year. High relative strength is a key part of the method, showing institutional interest and leadership.
This technical view meets the Trend Template's goal: to remove unstable or weak stocks and focus only on those with a high chance of continuing their clear upward path.
Qualifying for High Growth Momentum
While a solid chart is key, the Minervini method gives equal weight to speeding fundamental performance. The "High Growth Momentum" rating looks at a company's earnings, sales, and profit path. OR shows several key growth traits that support its screening pass:
- Explosive Earnings Growth: The company is showing notable profit growth. Earnings per share (EPS) grew 44.9% over the trailing twelve months (TTM). More notably, the growth rate has sped up sharply in the most recent quarter, with EPS jumping 102% year-over-year. This pattern of speeding up is a main goal for momentum investors.
- Strong Sales Momentum: Revenue growth has also gained speed, with a 72.3% rise in the last quarter. This hints the earnings growth is being pushed by top-line growth, not just cost reduction, which is a more lasting driver for long-term growth.
- Expanding Profitability: The company's profit margin in the last quarter was a very high 115.7%, a major growth from 53.6% in the prior quarter and 12.8% two quarters before. This fast margin gain points to operating leverage and pricing strength.
- Positive Analyst Revisions: Analysts have been increasing their estimates, a key positive signal. The average EPS estimate for next year has been raised by 1.7% over the last three months, while revenue estimates have been raised by 4.7%. Upward revisions often come before more price gains as the market absorbs better expectations.
These fundamental numbers fit with the growth investor's aim of finding companies in the early parts of a strong earnings cycle, where better results can drive continued stock price growth.
Technical Health and Current Setup
According to ChartMill's own analysis, OR gets a top-level Technical Rating of 10 out of 10, showing very good technical health. The report notes the stock is in a positive long-term and short-term trend, regularly does better than the wider market, and recently reached a new 52-week high. The solid average trading volume also gives good liquidity for investors.
However, the analysis also gives a note of warning for immediate entry: the Setup Quality rating is a low 3. The report says that while the technicals are very good, recent price movement has been "a little bit too volatile to find a nice entry and exit point," suggesting the stock may be stretched in the short term and could gain from a time of settling before offering a lower-risk entry chance.
For a full breakdown of the support levels, trend study, and detailed rating parts, readers can see the full technical report for OR.
Finding Similar Opportunities
OR Royalties Inc shows the kind of stock that passes a strict combined screen for trend and growth. For investors wanting to find other stocks that meet similar firm rules for technical strength and fundamental momentum, more study can be done using the preset screen.
Discover more stocks that meet the High Growth Momentum + Trend Template criteria.
Conclusion
OR Royalties Inc offers a case where strong technical strength and speeding fundamental growth meet. The stock passes the strict checks of the Minervini Trend Template, confirming its place in a solid primary uptrend with better relative performance. At the same time, its explosive recent earnings growth, sales speed-up, and growing margins meet the rules wanted by high-growth momentum investors. While the current technical setup hints at waiting for a best entry point, the basic profile makes OR a stock worth adding to the watchlists of investors using this two-part method.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. The analysis is based on data provided and certain screening methodologies. Investors should conduct their own due diligence and consider their individual financial situation and risk tolerance before making any investment decisions. Past performance is not indicative of future results.
