Texas Capital Bancshares Inc (NASDAQ:TCBI) Passes Minervini's SEPA Growth and Trend Screen

For investors looking to join solid price momentum with sound fundamental growth, the method developed by Mark Minervini offers a structured system. This process, frequently called the SEPA (Specific Entry Point Analysis) strategy, methodically finds stocks showing both forceful technical uptrends and quickening business results. The central technical filter is the Minervini Trend Template, a group of rules made to spot stocks in a verified Stage 2 advance. This is combined with fundamental filters for high growth momentum, concentrating on firms showing notable and frequently quickening gains in earnings, sales, and profit margins. The aim is to discover leaders early in their major price advances, where the combination of a forceful chart and strong fundamentals creates the possibility for outstanding returns.

TEXAS CAPITAL BANCSHARES INC (NASDAQ:TCBI) recently appeared through a filter using this two-part process, indicating it deserves more examination from growth-focused investors.

Examining the Technical Base: The Trend Template

A fundamental part of the Minervini strategy is trading in the direction of the set trend. The Trend Template gives a strict list to confirm a stock is in a sound, long-term uptrend before review. TCBI seems to satisfy these important technical requirements:

• Price Above Key Moving Averages: The stock's last price of $91.70 trades above its 50-day ($89.25), 150-day ($85.14), and 200-day ($81.53) simple moving averages (SMAs). This ordered alignment shows continued buying pressure across several timeframes.
• Upward-Sloping Long-Term Averages: Both the 150-day and 200-day SMAs are increasing, verifying the long-term trend is positive. The 200-day SMA, a main benchmark for institutional investors, has moved up from 81.45 to 81.53, giving a base of support.
• Correct Moving Average Order: The shorter-term 50-day SMA ($89.25) is positioned above both the longer-term 150-day and 200-day averages. This order is typical of a stock in a solid Stage 2 advance, where shorter-term momentum guides the longer-term trend.
• Nearness to Highs: At $91.70, TCBI is trading within 25% of its 52-week high of $98.07 and is more than 30% above its 52-week low of $59.37. Minervini’s study shows that market leaders frequently make their largest advances when close to new highs, not when they are "low-priced" and declining.
• Solid Relative Strength: With a ChartMill Relative Strength (CRS) score of 78.27, TCBI is doing better than nearly 80% of the market. High relative strength is a sign of leadership, showing the stock is drawing capital even when other names may be facing difficulty.

This technical picture indicates TCBI is not in a forming or falling stage but is situated within a positive uptrend, meeting the first part of the SEPA method.

Examining the Growth Driver: High Growth Momentum

While a solid chart is necessary, Minervini notes that the largest winners are nearly always backed by strong fundamental quickening. The "High Growth Momentum" part of the filter searches for proof of this activity. TCBI’s recent financial measures show several notable growth signs:

• Strong Earnings Growth: The latest quarterly EPS jumped 171.56% year-over-year. Even more notable is the pattern of quickening in the earlier quarters, with growth rates of 15.15%, 9.42%, and 15.39% in the previous periods. This sequence of rapidly quickening bottom-line growth is a main quality looked for by growth investors.
• Sound Annual Profit Growth: On a trailing twelve-month (TTM) basis, earnings per share have increased over 90%. This shows that the solid quarterly performance is adding to a major year-on-year gain.
• Gaining Profitability: The firm's profit margin in the last reported quarter was 29.64%, a major gain from 23.75% the quarter before and 15.24% two quarters earlier. This pattern of growing margins suggests better operational efficiency and pricing ability, which can lead to exponential earnings growth.
• Analyst Belief: Analysts have increased their earnings estimates for the next fiscal year by over 5% in the last three months. Upward revisions often come before more price growth as the market adapts to better future outlooks.

These fundamental parts address the "Catalyst" and "Fundamentals" pieces of Minervini’s SEPA strategy. They show that the stock’s price strength may be based in real business momentum, rather than speculative excitement only.

Technical Analysis Summary and Pattern

ChartMill’s own technical report for TCBI gives a Technical Rating of 6, stating the stock is an average performer with a positive long-term trend but some recent pause. More significantly, it gives a Setup Rating of 8, pointing out that the stock is showing a notable consolidation chance.

The report finds a clear support area between $89.25 and $90.54, made by a combination of moving averages and trendlines. After an advance, the stock has moved back into this support zone, narrowing its price range and lowering volatility, a action that can come before a new upward move. The examination indicates that with little close resistance above, a move above the recent pattern could offer a specific entry point with a reasoned stop-loss level under the support area.

You can see the full, detailed technical review for TCBI here: ChartMill Technical Analysis Report for TCBI.

A Subject for More Study

Based on the used filter rules, Texas Capital Bancshares Inc presents a case that fits with the ideas of growth momentum investing. It shows the technical signs of a stock in a maintained uptrend according to the Minervini Trend Template, joined with fundamental measures showing sharp quickening in earnings and profitability. The present price action, as noted in the technical report, indicates it may be making a positive pattern after a move back.

Want to find other stocks that pass this strict mix of trend and growth filters? You can see the present filter results through 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 filter rules and data given at a specific time. Always do your own complete study, thinking about your financial position, risk tolerance, and investment goals. Please read our full disclaimer here.