Phibro Animalimal Health Corp-A (NASDAQ:PAHC) Combines Strong Technicals and High Growth Momentum

Phibro Animal Health Corp-A (NASDAQ:PAHC) has recently appeared as an interesting candidate for investors using a combined technical and fundamental growth strategy. The stock was found through a screening process that brings together Mark Minervini’s Trend Template, a systematic method for finding stocks in strong uptrends, with a High Growth Momentum (HGM) rating, which points out companies showing strong earnings and sales acceleration. This two-part method tries to find equities that are not only technically healthy but also show fundamental health, putting them in a position for possible continued good performance.

Technical Strength: Meeting the Minervini Trend Template

PAHC meets all important technical conditions described in Minervini’s Trend Template, which is made to identify stocks in established Stage 2 uptrends, marked by rising moving averages, good relative strength, and nearness to new highs. These conditions help confirm the stock is being accumulated and has momentum.

• Price Above Key Moving Averages: PAHC’s current price of $38.20 trades well above its 50-day ($29.79), 150-day ($24.65), and 200-day ($24.08) simple moving averages. This multi-layered alignment shows sustained bullish momentum across short, medium, and long-term timeframes.
• Upward-Sloping Moving Averages: The 50-day, 150-day, and 200-day moving averages are all moving higher, confirming the health and consistency of the uptrend.
• Significant Price Appreciation: The stock is trading 136% above its 52-week low of $16.16 and within 2% of its 52-week high of $38.83, meeting Minervini’s condition that stocks show major recovery and trade near new highs, a feature common among market leaders.
• Superior Relative Strength: With a ChartMill Relative Strength (CRS) score of 95.08, PAHC is doing better than 95% of all stocks, indicating strong market leadership, a key part of Minervini’s strategy.

Fundamental Momentum: High Growth Qualities

Along with its technical condition, PAHC shows strong fundamental momentum, seen in its High Growth Momentum (HGM) rating. This rating focuses on accelerated growth in earnings, sales, and profitability, factors that often bring institutional interest and lead to more price increases.

• Earnings Growth Acceleration:
  • EPS growth on a quarterly year-over-year basis has been strong: most recently 39%, before that 103%, 64%, and 150% in earlier quarters.
  • Full-year EPS growth jumped 75.6%, signaling a major turnaround and operational improvement.
• Sales Momentum:
  • Recent quarterly revenue growth was 38.6%, with earlier quarters showing 32.1%, 23.7%, and 12.6% growth, indicating a steady increase.
• Profit Margin Expansion:
  • Quarterly profit margins have grown significantly, from 0.28% three quarters ago to 6.0% in the most recent quarter, a positive sign of operational efficiency and pricing power.
• Estimate Revisions and Surprises:
  • The company has exceeded EPS estimates in each of the last four quarters, with an average surprise of 25.7%, showing consistent outperformance compared to expectations.

These parts are important within Minervini’s SEPA (Specific Entry Point Analysis) framework, which notes that stocks with strong fundamental acceleration, especially in earnings and margins, are more likely to have sustained price increases.

Technical Analysis Overview

According to ChartMill’s technical report, PAHC gets a perfect rating of 10/10, reflecting very good technical health. The long and short-term trends are both positive, and the stock is trading near its 52-week high with increasing volume, a sign of growing interest. However, the setup quality is rated modestly (3/10), suggesting that while the trend is healthy, the stock may be overbought in the near term. Investors may want to wait for a consolidation or pullback to improve the risk/reward profile for new entries.

Read the full technical report for PAHC here.

Conclusion

PAHC represents an interesting case of a stock that fits with both technical and fundamental growth strategies. Its meeting of the Minervini Trend Template shows a healthy uptrend, while its strong earnings growth, margin expansion, and consistent estimate beats highlight fundamental momentum. For investors focused on high-growth opportunities within trending markets, PAHC offers a notable example of how bringing together technical and fundamental screens can find potential leaders.

For those interested in finding similar high-growth, technically healthy candidates, our predefined screen, High Growth Momentum + Trend Template, is updated regularly and available for more research.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. All investment decisions carry risk, and individuals should conduct their own research or consult a financial advisor before making investment decisions.