In the search for returns that exceed the market, many investors join detailed technical study with fundamental growth filters. A well-known model of this method is the system made famous by Mark Minervini, which centers on finding stocks already in strong upward moves that also have the backing of improving business results. The system depends on a two-step screen: first, using the "Trend Template" to confirm a stock's price movement shows definite, multi-period power, and second, checking that the company shows the profit and revenue speed typical of market frontrunners. This method tries to find stocks in the beginning or middle parts of a major price rise, where the combination of technical breakout possibility and fundamental improvement presents a good balance of risk and reward.
TD SYNNEX CORP (NYSE:SNX) stands as a present example that seems to meet both the technical and growth standards of this joined system.
Technical Fit with the Minervini Trend Template
The Minervini Trend Template is built to screen for stocks in a clear Stage 2 upward move, passing over weak performers and concentrating on market frontrunners. An examination of SNX's technical measures shows a solid fit with these guidelines:
- Trading Above Important Averages: The stock's latest price of $186.92 trades well above its increasing 50-day ($160.45), 150-day ($155.38), and 200-day ($152.10) simple moving averages (SMAs). This meets the main template rule that price must be above all three averages, confirming the stock is in a clear upward move across near, medium, and longer-term periods.
- Correct Moving Average Order: The 50-day SMA is above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This ordered arrangement points to continued and increasing buying activity, a central idea of Minervini's method that divides strong moves from poor ones.
- Nearness to Highs: SNX's price is within 25% of its 52-week high of $191.79, and is actually trading close to that high now. At the same time, the price is over 100% above its 52-week low of $92.23, well past the 30% minimum. This pairing indicates strong speed and an absence of selling pressure from above, as the stock does not carry the weight of many investors holding at a loss.
- Strong Comparative Performance: With a ChartMill Comparative Performance (CRS) score of 90.94, SNX has done better than over 90% of the market in the last year. High comparative performance is a foundation of the system, as it finds stocks that are wanted and guiding the market up, not just following.
Fundamental Picture for Strong Growth Speed
While the Trend Template deals with the "when" to buy, the "why" is frequently located in the fundamentals. The High Growth Momentum (HGM) score looks for companies displaying improving financial results, a trait Minervini connects to possible major gains. SNX's recent financial numbers show several good factors:
- Profit Improvement: The company is showing notable profit growth speed. Most importantly, EPS growth for the most recent quarter jumped 68.93% compared to the year before. This comes after earlier quarters of good growth (23.95%, 25.17%), pointing to a recent and clear improvement in profitability, a strong fundamental driver.
- Steady Profit Exceedances: SNX has topped analyst EPS predictions in all of the last four quarters, with an average exceedance of 17.18%. Steady positive exceedances can push increases in future predictions and draw institutional attention, supporting more price gains.
- Solid Revenue Growth: Revenue growth has also improved, with the last quarter growing 18.09% year-over-year, up from high single-digit growth in previous quarters. This sales strength backs the profit growth and implies increasing need for the company's IT distribution and services.
- Gaining Profitability: The company's profit margin in the last quarter was 1.89%, which shows an improvement from the quarter before and is higher than the margins from the same quarter a year ago. Growing margins on increasing sales is a clear signal of operating efficiency and effective growth.
Technical Condition and Present Pattern
According to ChartMill's own analysis, SNX now has a top-level Technical Rating of 10 out of 10, putting it with the market's strongest performers from a trend view. The report states the stock is guiding the wider market, recently reaching a new 52-week high while the S&P 500 has not. Trading activity has also risen during the latest upward move, a sign of institutional buying.
However, the analysis also gives an important warning for entry timing. The stock's Setup Quality Rating is a low 2, meaning that after its strong advance, the price is stretched and not now in a standard pause or "base" formation. The report conclusion suggests that while the technical condition is very good, "it may be a good idea to wait for a pause or decline before considering an entry." This shows the difference between finding a strong stock and finding a low-risk entry point inside that stock's move.
For a full look at the support points, trend study, and complete technical notes, you can see the complete Technical Analysis Report for SNX.
Locating Comparable Prospects
TD SYNNEX offers an example in a stock that fits a strict growth-and-speed system, displaying strong trend traits and improving fundamentals. For investors looking to systematically search for comparable prospects that meet both the Minervini Trend Template and strong growth standards, a ready-made screen exists. You can view the present results of this "High Growth Momentum + Trend Template" screen here.
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 data provided and does not constitute investment advice. All investing involves risk, including the potential loss of principal. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.