Would Mark Minervini consider TAL EDUCATION GROUP- ADR (NYSE:TAL) a top stock pick?

In this article we will dive into TAL EDUCATION GROUP- ADR (NYSE:TAL) as a possible candidate for growth investing. Investors should always do their own research, but we noticed TAL EDUCATION GROUP- ADR showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

Minervini Trend Template Analysis.

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for TAL:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Unpacking TAL's High Growth Momentum Rating

ChartMill assigns a proprietary High Growth Momentum Rating (HGM) to each stock. The score is computed by evaluating various growth and profitability aspects aspects, like EPS and revenue growth, accelleration, surprises and revisions. TAL was assigned a score of 7 for growth:

Earnings Momentum

• In the most recent financial report, TAL reported a 194.0% increase in quarterly earnings compared to the previous quarter. This notable growth indicates positive momentum in the company's financials, suggesting an upward trend
• TAL shows accelerating EPS growth: when comparing the current Q2Q growth of 194.0% to the previous quarter Q2Q growth of 47.47%, we see the growth rate improving.
• Over the past year, TAL has demonstrated 520.0% growth in EPS, signifying its positive financial trajectory and potential for future profitability.
• The q2q revenue growth of 62.37% of TAL highlights the company's ability to generate incremental revenue and suggests positive market demand for its products or services.
• TAL shows accelerating Sales growth: when comparing the current Q2Q growth of 62.37% to the previous quarter Q2Q growth of 50.37%, we see the growth rate improving.
• With impressive 1-year revenue growth of 55.63%, TAL showcases its ability to generate increased sales and revenue. This growth highlights the company's strong customer demand and its effective business strategies.
• TAL has consistently surpassed EPS estimates in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.

Profitability & Financial Strength

• TAL has experienced notable growth in its operating margin over the past year, reflecting improved operational performance. This growth suggests the company's ability to generate higher profits from its core business activities.
• TAL has shown positive growth in its free cash flow (FCF) over the past year, indicating improved cash generation and financial strength. This growth highlights the company's ability to effectively manage its cash flows and generate surplus funds.
• Maintaining a Debt-to-Equity ratio of 0.01, TAL demonstrates a conservative financial approach. This signifies the company's focus on minimizing debt burdens while preserving a solid equity position.

Institutional Confidence & Market Strength

• With institutional shareholders at 64.46%, TAL demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• TAL has exhibited strong Relative Strength(RS) in recent periods, with a current 90.49 rating. This indicates the stock's ability to outperform the broader market and reflects its competitive position.

Looking at the Setup

ChartMill assigns a Setup Rating to evaluate the consolidation level of a stock. This rating, ranging from 0 to 10, is updated daily and considers various short-term technical indicators. The current setup rating for TAL is 6:

TAL has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 13.21, a Stop Loss order could be placed below this zone.

Our latest full technical report of TAL contains the most current technical analsysis.

Final Thoughts

More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.