Arrow Electronics (NYSE:ARW) is a stock that has recently been attracting attention from growth-oriented investors, and for good reason. The company was identified through a screening process that combines two effective methods: Mark Minervini’s Trend Template and a High Growth Momentum (HGM) filter. The Minervini Trend Template is a systematic approach designed to pinpoint stocks that are in strong, sustainable uptrends, relying on specific technical criteria such as moving average alignments and relative strength rankings. By overlaying this with an HGM rating of at least 4, we ensure the stock also exhibits the fundamental acceleration and earnings momentum that typically drive outsized returns in growth investing. This dual-screen aims to find stocks that are not only technically sound but also backed by solid business performance, creating a strong combination for potential long-term gains.
Technical Foundation: Meeting the Minervini Trend Template
The core of the Minervini strategy is to trade only when a stock shows clear, multi-timeframe strength. ARW currently satisfies all eight of the Trend Template’s key conditions, which is a strong vote of confidence from a technical perspective.
- Current Price vs. Moving Averages: The stock trades at $215.15, which is comfortably above its 50-day SMA ($207.43), its 150-day SMA ($156.83), and its 200-day SMA ($147.14). This indicates that buyers are in control across all relevant timeframes.
- Moving Average Slope: The 150-day, 200-day, and 50-day SMAs are all trending upward. The 50-day SMA is also above the 150-day and 200-day SMAs, confirming the alignment of a strong uptrend.
- 52-Week Range: The current price is 30% above its 52-week low of $101.79 (it’s actually 111% above it) and within 25% of its 52-week high of $237.33. This places it firmly in the territory of a stock that is leading, not lagging.
- Relative Strength: The ChartMill Relative Strength score stands at a stellar 92.25, meaning ARW is outperforming over 92% of all stocks in the market. This aligns perfectly with Minervini’s requirement for a score of 70 or higher, preferably in the 80s or 90s.
These technical conditions are not arbitrary. Minervini’s research shows that stocks making their biggest moves almost always exhibit this kind of price behavior before they surge higher. They are already under accumulation by institutional investors, and the trend is your friend.
High Growth Fundamentals: The Earnings and Revenue Story
While the technical side is impressive, the strategy also demands that you look under the hood. The High Growth Momentum screen is designed to validate that the technical strength is being driven by real, accelerating business performance. ARW’s fundamentals here are a perfect fit.
- Earnings Growth: The company has posted exceptional recent numbers. EPS growth in the last quarter (Q2Q) was a staggering 190%, and it has accelerated from 47.8% in the previous quarter. The TTM EPS growth is a solid 49.9%. This kind of acceleration is a hallmark of a super-performer.
- Revenue Growth: Sales are also on a strong upward trajectory. The latest quarterly revenue growth was 39%, and the TTM revenue growth stands at 20.5%. This is a classic sign of strong demand and pricing ability.
- Profit Margins: Margins are expanding. The latest quarterly profit margin of 2.48% has improved from 2.22% and 1.42% in the prior two quarters. This shows the business isn’t just selling more, but also becoming more efficient and profitable.
- Estimate Revisions: Analysts are raising their forecasts. The average EPS estimate for next year has been revised up by 49.8% in the last three months, and revenue estimates have been revised up by 12.66%. This upward revision is a key catalyst that Minervini looks for.
The fundamental data is a perfect complement to the technical picture. The sharp acceleration in earnings and revenue, combined with expanding margins and upward estimate revisions, provides a strong catalyst for the stock’s continued upward movement.
Summary of the Technical Report
Our detailed technical analysis of ARW currently gives the stock an overall Technical Rating of 8 out of 10. This high score is driven by a positive long-term trend and excellent relative strength. However, the Setup Quality score is only 3 out of 10. While the stock is technically very healthy, the recent price action has been volatile. It is currently trading in the middle of a wide range ($210 to $237), which means a high-quality, low-risk entry point is not yet present. The price needs to form a tighter consolidation pattern and then break out to provide a better reward-to-risk setup for entry.
Explore More Opportunities
ARW appears to be a strong candidate for high-growth investors who are patient enough to wait for a proper entry point. The underlying business momentum is undeniable. If you are interested in finding other stocks that pass this strong combination of technical strength and fundamental growth, you can run the full screen yourself.
Click here to view the full list of stocks that meet the High Growth Momentum + Minervini Trend Template criteria.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks and investing in the financial markets involves substantial risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a licensed financial advisor before making any investment decisions.
Read full article here »
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Arrow Electronics (NYSE:ARW) Shows Strong Momentum with Minervini Trend Template and High Growth Fundamentals
Arrow Electronics (NYSE:ARW) is a stock that has recently been attracting attention from growth-oriented investors, and for good reason. The company was identified through a screening process that combines two effective methods: Mark Minervini’s Trend Template and a High Growth Momentum (HGM) filter. The Minervini Trend Template is a systematic approach designed to pinpoint stocks that are in strong, sustainable uptrends, relying on specific technical criteria such as moving average alignments and relative strength rankings. By overlaying this with an HGM rating of at least 4, we ensure the stock also exhibits the fundamental acceleration and earnings momentum that typically drive outsized returns in growth investing. This dual-screen aims to find stocks that are not only technically sound but also backed by solid business performance, creating a strong combination for potential long-term gains.
Technical Foundation: Meeting the Minervini Trend Template
The core of the Minervini strategy is to trade only when a stock shows clear, multi-timeframe strength. ARW currently satisfies all eight of the Trend Template’s key conditions, which is a strong vote of confidence from a technical perspective.
These technical conditions are not arbitrary. Minervini’s research shows that stocks making their biggest moves almost always exhibit this kind of price behavior before they surge higher. They are already under accumulation by institutional investors, and the trend is your friend.
High Growth Fundamentals: The Earnings and Revenue Story
While the technical side is impressive, the strategy also demands that you look under the hood. The High Growth Momentum screen is designed to validate that the technical strength is being driven by real, accelerating business performance. ARW’s fundamentals here are a perfect fit.
The fundamental data is a perfect complement to the technical picture. The sharp acceleration in earnings and revenue, combined with expanding margins and upward estimate revisions, provides a strong catalyst for the stock’s continued upward movement.
Summary of the Technical Report
Our detailed technical analysis of ARW currently gives the stock an overall Technical Rating of 8 out of 10. This high score is driven by a positive long-term trend and excellent relative strength. However, the Setup Quality score is only 3 out of 10. While the stock is technically very healthy, the recent price action has been volatile. It is currently trading in the middle of a wide range ($210 to $237), which means a high-quality, low-risk entry point is not yet present. The price needs to form a tighter consolidation pattern and then break out to provide a better reward-to-risk setup for entry.
Explore More Opportunities
ARW appears to be a strong candidate for high-growth investors who are patient enough to wait for a proper entry point. The underlying business momentum is undeniable. If you are interested in finding other stocks that pass this strong combination of technical strength and fundamental growth, you can run the full screen yourself.
Click here to view the full list of stocks that meet the High Growth Momentum + Minervini Trend Template criteria.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks and investing in the financial markets involves substantial risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a licensed financial advisor before making any investment decisions.
Read full article here »