In growth investing, mixing a strict technical system with attention to fundamental momentum can be a strong method for spotting possible leaders. A method like the Mark Minervini plan joins his specific Trend Template with a thorough review of earnings and sales speed. The Trend Template works as a technical screen, checking a stock is in a clear, strong uptrend by looking at its level compared to important moving averages and how close it is to new highs. This is combined with a look for "High Growth Momentum" (HGM), which studies a company's latest financial results for signals of fast growth in profits and sales, good earnings surprises, and rising analyst changes. The aim is to locate stocks that are both technically sound and also pushed by fundamentally better and speeding business results.
SCORPIO TANKERS INC (NYSE:STNG) runs a current fleet of tankers that move refined petroleum products like gasoline and diesel worldwide. The company's results are linked to shipping rates in the product tanker market, which have shown notable changes and force in recent times.
Technical Fit with the Minervini Trend Template
A main idea of the Minervini plan is to invest with the current trend, steering clear of the problems of trying to buy a declining stock. The Trend Template gives a step-by-step list to find stocks in a solid Stage 2 rise. Scorpio Tankers now shows a strong fit with these technical points:
- Price Over Important Moving Averages: The stock's last price of $76.01 trades well over its rising 50-day ($71.67), 150-day ($61.95), and 200-day ($57.76) simple moving averages (SMAs). This ordered layout, with the shorter-term averages over the longer-term ones, is a standard mark of a good, continued uptrend.
- Moving Average Directions: Importantly, these averages are not just prices but are themselves moving up. The 200-day SMA, for example, has increased from $57.59 to its present level, confirming positive long-term momentum.
- Nearness to Highs: At $76.01, STNG is trading within 7% of its 52-week high of $81.85 and is a strong 129% over its 52-week low of $33.21. Minervini notes that real market leaders often reach new highs, and a stock's capacity to keep gains and move toward new highs shows basic force and institutional interest.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 93.77, STNG is doing better than nearly 94% of all stocks. High relative strength is a key part of the method, as it finds securities that are wanted even when the wider market shifts.
This technical view indicates STNG is in a definite, strong uptrend, meeting the main screen of the Minervini method which aims to use existing momentum instead of guessing turns.
Fundamental Momentum for Growth Investors
While the Trend Template checks a stock is technically good, the "High Growth Momentum" part of the search looks for the basic force that can push a stock more. Here, Scorpio Tankers shows a detailed but strong case based on the newest quarterly data, even with some softer year-over-year looks.
- Fast Recent Earnings Growth: The newest quarter shows a major year-over-year EPS growth of 157.1%. This type of speed is just what growth and momentum investors look for, as it can mark a strong change point in profit. Also, analysts expect this momentum to keep going, with next quarter's EPS forecast to grow by 130.5%.
- Steady Earnings Surprises: The company has topped EPS estimates in each of the last four quarters, with an average beat of 18.5%. This habit of beating expectations builds trust with investors and can lead to upward changes and new ratings.
- Solid and Growing Profitability: The latest quarterly profit margin is at a notable 50.7%, a clear growth from the 35.0% margin in the previous quarter. Rising margins on speeding sales growth is a strong mix that shows pricing control and operational effectiveness.
- Positive Analyst Changes: Backing the momentum idea, analysts have increased their earnings estimates for the next fiscal year by 1.54% over the last three months. Upward changes often come before more price gains as the market adapts to better future outlooks.
It is key to see that longer-term yearly numbers (for example, TTM EPS growth of -44.2%) show the cyclical drop the tanker market saw before the recent rise. The Minervini and HGM method is focused on the shift and speed in the newest data, the "second derivative," which STNG now clearly shows.
Technical Condition and Setup Summary
Outside the specific Trend Template points, a wider technical review of STNG shows outstanding condition. The stock gets a complete ChartMill Technical Rating of 10/10, showing its solid results across many time frames and its leader position compared to the wider market. Both its short-term and long-term trends are graded as positive.
Also, with a Setup Quality rating of 8/10, the chart indicates the stock has been holding its recent gains in a fairly narrow band, possibly forming a base for its next step. The technical review finds a clear support area between $71.67 and $73.07, which could act as a sensible place for a stop-loss order, and notes a recent "Pocket Pivot" signal, showing buying. For a full look at the support, resistance, and a sample trade setup, readers can see the full technical report for STNG.
Conclusion
Scorpio Tankers offers a strong example for a mixed technical and fundamental momentum method. It solidly meets the strict technical needs of the Minervini Trend Template, trading in a solid uptrend with better relative strength. At the same time, its newest quarterly fundamentals display the type of fast earnings growth, margin growth, and positive estimate changes that high-growth momentum screens are made to find. While investors must always think about the natural cycles of the shipping business, the current match of these strong factors makes STNG a stock worth more review for investors using such plans.
Interested in locating other stocks that match this High Growth Momentum and Trend Template outline? You can run the screen yourself using this pre-set stock screener.
Disclaimer: This article is for information and learning only. It is not a suggestion to buy or sell any security. The review is based on given data and certain methods, but past results do not show future outcomes. Always do your own research and think about talking with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.