PAN AMERICAN SILVER CORP (NYSE:PAAS) Fits the Minervini SEPA Model with Strong Technicals and High-Growth Fundamentals

For investors looking to join solid technical trends with firm fundamental growth, the method created by Mark Minervini provides an ordered system. This system, called the Specific Entry Point Analysis (SEPA), depends on finding stocks that are already in strong uptrends, confirmed by a fixed group of moving average and momentum rules, and are at the same time backed by quickening earnings and sales growth. The aim is to find leaders near the start of their large price increases by making sure both the price movement and the basic business fundamentals are working together. A stock that clears this two-part check makes a strong argument for high-growth momentum investors.

PAN AMERICAN SILVER CORP (NYSE:PAAS) recently appeared through a scan made to find these chances, sorting for stocks that fit Minervini's Trend Template and also have a High Growth Momentum (HGM) rating. We will look at why this silver and gold producer seems to fit this strict plan.

A Clear Technical Trend

Fundamentally, the Minervini Trend Template is made to remove stocks in poor or resting stages, concentrating only on those showing definite, institution-quality uptrends. PAAS at this time meets this high technical standard, displaying the sort of force Minervini’s rules are made to find.

• Moving Average Arrangement: The stock’s price is trading notably above its important moving averages (50-day, 150-day, and 200-day), a main condition. Importantly, these averages are in the correct positive order: the 50-day SMA ($39.53) is above the 150-day SMA ($33.41), which is above the 200-day SMA ($31.37). Also, all these averages are moving upward, confirming continued buying interest across several time periods.
• Nearness to Highs: A principle of the plan is to concentrate on force, not low price. PAAS is trading within 5% of its 52-week high of $52.24, showing it is a market leader, not a follower. At the same time, its present price is more than 150% above its 52-week low, meaning a strong recovery and continued uptrend is already in place.
• Better Relative Strength: Possibly most significant is the stock’s ChartMill Relative Strength (CRS) of 95.89. This means PAAS has done better than about 96% of all stocks in the market over the last year. Minervini states that real market leaders show high relative strength, as it means the stock is wanted no matter the wider market direction.

This technical view meets the "trend" part of the SEPA method, suggesting the stock is in a sound Stage 2 rise.

Supporting the Trend: High-Growth Fundamentals

A forceful chart is only part of the account. The Minervini plan requires that strong price movement be checked by outstanding business results. This is where the High Growth Momentum filter works, and PAAS shows several strong fundamental drivers.

• Very High Earnings Growth: The company has reported very high year-over-year earnings growth. EPS growth for the trailing twelve months is at 320%, and recent quarterly reports show rises of 50%, 291%, and a very high 4,100% over the last three quarters. This sequence of large acceleration is just what high-growth investors and the Minervini method look for—"big earnings draw big notice."
• Positive Changes & Beats: Analyst view is getting stronger, with the average EPS guess for next year changed upward by more than 22% in the last three months. Also, the company has exceeded EPS guesses in three of the last four quarters by an average of 39%, meaning steady better-than-expected results.
• Strong Sales and Cash Flow Growth: Revenue growth is firm, with the last quarter up 42% year-over-year. More notably, Free Cash Flow per share has jumped over 560% in the past year, giving the company important financial room for work, search, or investor payments.
• Growing Profitability: The company's profit margin in the last reported quarter was a sound 19.7%, showing a clear gain from 13.2% three quarters before. This direction of growing margins means working efficiency and pricing ability are getting better together with top-line growth.

These fundamental numbers speak to the "fundamentals" and "catalyst" parts of Minervini's SEPA system, giving a basic reason for the stock's forceful technical breakout.

Technical Condition and Present Position

Based on ChartMill’s own study, PAAS receives a top-level Technical Rating of 10 out of 10, reflecting very good condition across short and long-term trends. The report states the stock is reaching new 52-week highs on rising volume, a clear sign of force. Both the short-term and long-term trends are scored as positive.

However, the study also gives a word of care for immediate entry: the Setup Quality rating is at this time a 3. This means that after its fast recent climb, the stock could be stretched in the short term and is not in a close, low-volatility resting pattern that usually gives a lower-risk entry point. The report proposes waiting for a time of rest or a move back to a key support area, such as the band between $42.88 and $43.54, before thinking about a new position. This fits well with the Minervini idea of waiting for a Specific Entry Point instead of following a stock higher.

You can see the complete, full technical study for PAAS here.

Locating Like Chances

PAN AMERICAN SILVER CORP shows the kind of security that clears a strict combined scan for trend and growth. For investors wanting to find other stocks that meet like conditions of Minervini’s Trend Template and high-growth momentum, you can inspect the preset scan here.

Disclaimer: This article is for information and learning only. It is not a suggestion to buy or sell any security. The study is based on present data and a particular investment method. All investing has risk, including the possible loss of original money. You should do your own study and think about talking with a qualified financial advisor before making any investment choices.