Douglas Dynamics Inc (NYSE:PLOW) Fits the Minervini Growth Momentum and Trend Template

For investors looking to join solid technical trends with solid fundamental growth, the method created by Mark Minervini offers a structured system. This method, often called the SEPA (Specific Entry Point Analysis) strategy, depends on finding stocks that are already in solid uptrends, confirmed by a specific set of moving average arrangements and closeness to new highs, while also showing speeding earnings and sales growth. The aim is to find leaders early in their main price moves, where the combination of technical solidity and fundamental betterment makes a high-probability situation for solid gains.

A stock that currently appears when using a combined "High Growth Momentum + Trend Template" filter is DOUGLAS DYNAMICS INC (NYSE:PLOW). This maker of commercial work truck attachments and equipment seems to fit several main ideas of the growth momentum investment view.

Technical Fit with the Minervini Trend Template

The Minervini Trend Template is made to filter for stocks in a confirmed Stage 2 uptrend, making sure an investor is buying into confirmed solidity instead of trying to find a bottom. PLOW's present technical position meets these strict standards:

• Trending Above Key Averages: The stock price ($32.99) trades above its rising 50-day ($31.96), 150-day ($31.06), and 200-day ($29.53) simple moving averages (SMAs). This ordered arrangement points to continued buying pressure across several timeframes.
• Positive Moving Average Arrangement: The shorter-term 50-day SMA is above both the 150-day and 200-day SMAs, while the 150-day SMA is above the 200-day SMA. This ordered positive arrangement is a main part of the Trend Template, confirming the uptrend's soundness.
• Closeness to Highs: PLOW's price is within 4.1% of its 52-week high ($34.41) and is 54.9% above its 52-week low ($21.30). Minervini notes that true market leaders often trade near their highs, not stay near lows.
• Solid Relative Strength: With a ChartMill Relative Strength (CRS) score of 85.6, PLOW is doing better than about 86% of the market. High relative strength is important, as it shows the stock is a leader drawing institutional money, even during wider market changes.

This technical base indicates PLOW is in a sound uptrend, meeting the "trend" part needed for any Minervini-style situation.

Fundamental Reasons for Growth Momentum

While the Trend Template deals with the "when" to buy, the "why" is based in fundamental speeding. The High Growth Momentum (HGM) rating looks at a company's earnings and sales path. PLOW's recent financial numbers show clear positive motion:

• Strong Earnings Growth: The latest quarter showed a year-over-year EPS growth of 66.7%. This comes after a solid series in earlier quarters, including growth of 131.0% and 105.3%. On a trailing twelve-month (TTM) basis, EPS has grown 61.6%.
• Positive Estimate Changes: Analysts have been lifting their views, a key point Minervini looks for. The average EPS estimate for the next fiscal year has been moved up by 2.7% over the last three months, pointing to growing belief in the company's profit potential.
• Solid Sales and Margin Growth: After a time of slowing, quarterly sales growth has sped up to 25.3%. Maybe more importantly, the company's profit margin in the last reported quarter was 4.8%, a clear sequential betterment from a lower level and a sign of operational efficiency gains. For the full last fiscal year, the profit margin was a solid 9.7%.

This pattern of speeding quarterly earnings, upward changes, and margin recovery fits well with the "fundamentals" and "catalyst" parts of the SEPA strategy. It indicates the company is not just seeing a cyclical rise but may be doing a fundamental operational betterment.

Consolidation and Situation Quality

A last part of the situation is the present chart shape. According to the given technical analysis report, PLOW is currently "showing a bull flag pattern" and "prices have been consolidating lately." This kind of volatility tightening, after a solid upward move, is exactly the type of sound pause Minervini calls a Volatility Contraction Pattern (VCP). It lets the stock absorb its gains and form a new base of support from which to try its next rise. The report notes a good setup rating, with clear support near $32.25, which gives a logical area for risk management.

Technical Report Summary

The automated technical report for PLOW gives a solid rating of 8 out of 10, noting "a consistent performance in both the short and longer term time frames." Main points include:

• The long-term trend is positive, while the short-term trend is neutral, indicating a possible consolidation inside a larger uptrend.
• The stock is doing better than 83% of its peers in the Machinery industry.
• Several support zones are found below the present price, with the closest main resistance area between $33.18 and $34.06.

You can see the full, detailed technical analysis for DOUGLAS DYNAMICS INC (PLOW) here.

Finding Like Opportunities

PLOW shows the type of security that passes through a filter looking for both technical trend soundness and fundamental growth speeding. For investors wanting to find other stocks that presently meet like "High Growth Momentum + Trend Template" standards, this preset filter can be a useful beginning point for more study. You can open and use this filter directly here.

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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 automated data and preset filters. Investors should do their own full research, think about their financial position and risk tolerance, and talk with a qualified financial advisor before making any investment decisions. Past performance is not a guide to future results.