Investors looking to find high-potential stocks often search for a combination of strong technical trends and solid fundamental growth. One method that brings these parts together is the strategy made popular by Mark Minervini. His approach centers on finding stocks already in strong uptrends, as set out by his Trend Template, while also requiring excellent earnings and sales momentum. This two-step filtering method tries to identify leaders early in their major price increases. A recent scan made to locate such possibilities has pointed to Theravance Biopharma Inc (NASDAQ:TBPH) as a candidate for more detailed review.
The Minervini Trend Template: A Technical Base
The center of Minervini's stock selection starts with a fixed group of technical rules called the Trend Template. Its goal is to sort for securities showing clear, continued upward momentum across several time periods, making sure a trader is only involved in confirmed Stage 2 uptrends. Theravance Biopharma's present chart position matches these rules closely.
- Price Above Key Moving Averages: The stock's last price of $19.40 trades above its rising 50-day ($19.10), 150-day ($15.63), and 200-day ($14.27) simple moving averages. This order confirms the short, intermediate, and long-term trends are all positive.
- Moving Average Order: The 50-day SMA is positioned above both the 150-day and 200-day SMAs, while the 150-day SMA is above the 200-day SMA. This bullish sequence of averages points to increasing momentum.
- Nearness to Highs: With a 52-week high of $21.03, TBPH's current price is within 8% of its yearly peak, meeting the template's focus on strength near highs. It is also more than 145% above its 52-week low of $7.90, showing major recovery and trend strength.
- Superior Relative Strength: A ChartMill Relative Strength (CRS) score of 93.43 shows TBPH has performed better than 93% of all stocks over the past year. Minervini notes that true market leaders regularly display high relative strength, as it shows institutional interest and sector leadership.
This technical picture indicates TBPH is not just going up but is doing so with the kind of organized, leadership-quality trend that Minervini's method aims to use.
High Growth Momentum: The Fundamental Driver
While a strong chart is necessary, Minervini points out that the largest winners are nearly always backed by strong fundamental growth. This is where the High Growth Momentum (HGM) rating is used, sorting for companies showing speed increases in earnings and sales. Theravance Biopharma shows several strong data points that highlight its growth path.
- Large Quarterly Earnings Growth: The company's latest quarter shows earnings per share growth of 126.9% compared to the same quarter last year. Also, analyst estimates point to a very large 470% growth expected for the next quarter. This type of sharp earnings turn is a common sign of companies starting a high-growth period.
- Strong and Increasing Revenue: Revenue growth remains solid, with the last quarter up 18.5% year-over-year. The quarter before showed an even more notable 83.7% growth, pointing to powerful sales momentum. Analyst revenue estimates for the coming quarter suggest this pattern is likely to keep going, forecasting 176.6% growth.
- Positive Analyst Changes: Maybe one of the most clear signals for growth investors is when analysts meaningfully improve their forecasts. Over the last three months, the average EPS estimate for the next fiscal year has been moved upward by over 105%. Such major positive changes often come before times of strong stock performance as expectations are adjusted higher.
- Cash Flow Generation: The company's free cash flow per share has grown about 260% over the past year, moving to a positive $4.81. Getting better cash flow is an important fundamental confirmation, supplying the means for more investment and lowering financial risk.
These numbers indicate the company is going through a fundamental breakout, which can act as the driver that maintains and pushes the technical uptrend found by the Trend Template.
Technical Condition and Setup Quality
Beyond the basic Trend Template filters, a more detailed review of the technicals is wise. According to the complete ChartMill Technical Report, TBPH gets a high technical rating of 8 out of 10, reflecting its strong yearly performance where it has done better than most of the market. The long-term trend is labeled as positive, giving a good background.
Notably, the stock also gets a good setup rating of 8. This shows the price action has lately been moving in a range, with the report noting a decline that may be creating a possible entry point. The analysis finds clear support areas near $18.15 and $17.53, which can help mark sensible zones for risk control. The existence of a recent "Pocket Pivot" signal, a volume-based sign of buying, adds another piece of positive technical proof.
For a full review of the support and resistance levels, trend study, and a sample trade setup, readers can see the full ChartMill Technical Report for TBPH.
Conclusion
Theravance Biopharma shows a situation where a strict, rules-based scanning process finds agreement between technical momentum and fundamental speed increase. The stock fits the exact rules of the Minervini Trend Template, confirming its place in a strong uptrend with leadership-level relative strength. At the same time, its fundamental profile displays the kind of large quarterly earnings growth, solid sales patterns, and positive analyst changes that high-growth investors look for as a driver for more price gains. While the recent trading range points to a time of consolidation, the overall technical condition remains solid.
Interested in locating more stocks that fit this mix of strong trends and high growth? You can perform the same scan using this link: High Growth Momentum + Trend Template Screen.
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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 data provided and scanning methods described. Always conduct your own due diligence, consider your risk tolerance, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
