For investors looking to find market leaders with high growth potential, the method created by Mark Minervini offers a clear, rules-based system. This strategy, called the Specific Entry Point Analysis (SEPA), methodically joins careful technical and fundamental study. The aim is to locate stocks already in strong uptrends, supported by improving earnings and sales growth, and to begin positions at exact, low-risk moments. By following fixed rules, such as the Trend Template for technical condition and filters for strong growth momentum, this method tries to distinguish true market leaders from the wider group of stocks.
SOUTHERN COPPER CORP (NYSE:SCCO) appears as a candidate worth more study through this view. The global copper producer has shown a notable price performance that matches the central ideas of a momentum-based growth strategy.
Meeting the Minervini Trend Template
The base of the Minervini strategy is the technical Trend Template, a checklist made to confirm a stock is in a verified, strong uptrend. SCCO at this time meets these important technical conditions:
- Trend Alignment: The stock is trading well above its main moving averages (50-day, 150-day, and 200-day), and all these averages are themselves in rising patterns. This alignment shows continued buying pressure across several timeframes.
- Proximity to Highs: SCCO is trading within 4% of its 52-week high of $218.81, a main Minervini condition. Leaders often make new highs, not catch falling knives. Also, the current price is about 187% above its 52-week low, showing a strong recovery and continued uptrend.
- Superior Relative Strength: With a ChartMill Relative Strength (CRS) score of 96.31, SCCO is doing better than 96% of all stocks in the market over the past year. Minervini notes that the top performers are usually those showing better relative strength, as it points to institutional accumulation and leadership.
These technical factors together create an image of a stock in a solid Stage 2 advance, the exact phase where Minervini’s strategy aims to take part.
Qualifying for High Growth Momentum
While a strong chart is necessary, the Minervini idea states that the largest winners are driven by fundamental improvement. The "High Growth Momentum" (HGM) rating evaluates this important aspect. SCCO’s fundamental profile shows several signs of improving performance that support its rating:
- Earnings Improvement: The company has shown major year-over-year earnings per share (EPS) growth. Most importantly, EPS growth in the latest quarter increased by over 53%. This type of improvement is a primary driver Minervini searches for, as it often draws institutional attention and leads to re-ratings.
- Strong Profit Margins: Profit margins have been growing in sequence, with the last reported quarter showing a margin of 33.8%. Getting better margins show pricing power and operational efficiency, signs of a high-quality business in a good cycle.
- Positive Estimate Revisions: Analysts have been increasing their forecasts, with the average EPS estimate for the next year adjusted upward by over 20% in the last three months. Upward revisions are a strong sign of growing belief in a company’s future, a factor Minervini watches closely.
- Strong Sales and Cash Flow: Revenue growth stays good, and the company creates significant free cash flow per share, giving financial options and supporting the quality of earnings.
Technical Condition and Setup Summary
A look at the detailed ChartMill Technical Report gives SCCO a top-level technical rating of 10 out of 10, confirming outstanding trend strength. The report states both short-term and long-term trends are positive, and the stock is a top performer compared to the wider market.
The setup rating is a firm 7, showing the stock is consolidating within its uptrend, which can offer a possible entry chance. The study finds a clear support area near the $195 level, which could act as a logical place for a protective stop-loss order, matching the strategy's fixed risk management rules.
You can see the full, detailed technical study for SCCO here: SCCO Technical Analysis Report.
A Candidate for More Study
Based on the joined technical and fundamental filters, SOUTHERN COPPER CORP presents a profile that matches the conditions of the Minervini SEPA strategy. It shows the solid trend, high relative strength, and fundamental improvement the method looks for. For investors using a high-growth momentum method, SCCO represents a notable case of a commodity-based business operating with equity-like growth traits during a good macro cycle.
Interested in locating more stocks that meet this strict growth and momentum model? You can use the same "High Growth Momentum + Trend Template" screen that found SCCO to find other possible candidates. Click here to access the screen and see current results.
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 predefined screening criteria and historical data. Always conduct your own thorough research, consider your financial situation and risk tolerance, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
