Encore Capital Group (NASDAQ:ECPG) has been selected by a screen that combines two effective approaches: the Mark Minervini Trend Template and a High Growth Momentum (HGM) filter. The Minervini Trend Template is a strict set of technical criteria designed to identify stocks in strong, sustained uptrends—focusing on moving average alignment, price proximity to 52-week highs, and relative strength. The HGM rating, meanwhile, evaluates a stock's fundamental growth traits, such as earnings and revenue acceleration, profit margin trends, and estimate revisions. By requiring both a passing grade on the Trend Template and an HGM rating of at least 4 out of 10, this screen aims to surface stocks that are not only technically sound but also supported by accelerating business fundamentals—a combination that growth investors often seek.

Technical Alignment with the Minervini Trend Template

At the core of the Minervini strategy is the idea that the biggest winners come from stocks already in strong uptrends. Encore Capital Group achieves a perfect 10 on ChartMill’s Technical Rating, reflecting a clean and consistent upward trend. Let’s check the key Trend Template criteria:

• Current Price Above Key Moving Averages: The stock at $90.61 trades well above its 50-day ($83.15), 150-day ($68.86), and 200-day ($62.76) simple moving averages. This is the foundational requirement.
• Moving Average Alignment & Slope: All three major moving averages are trending upward. The 50-day SMA sits comfortably above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA—a textbook "proper order" that signals strong, layered momentum.
• 52-Week High & Low Proximity: The current price is 154% above the 52-week low of $35.68, far exceeding the 30% minimum. It is also within just 4.3% of the 52-week high of $94.60, satisfying the "within 25%" rule. This is a stock pushing into new high ground, not a laggard.
• Relative Strength: With a ChartMill Relative Strength score of 94.73, Encore Capital outperforms more than 94% of all stocks in the database. Minervini emphasizes that an RS score of at least 70 is the baseline, and ideally above 80 or 90. This stock clears that bar with room to spare.

The stock’s short-term and long-term trends are both positive, and it has outperformed 90% of its peers in the Consumer Finance industry. These technical factors are crucial because Minervini’s method relies on buying stocks that have already shown institutional demand and are in the accumulation phase (Stage 2).

High Growth Fundamentals Supporting the Technical Picture

While the Trend Template handles the “what” and “when” of price action, the HGM screen ensures the company’s underlying business is accelerating. Encore Capital’s fundamental profile is strong:

• Earnings Growth & Acceleration: Earnings per share (TTM) stand at $12.89, with 113.8% growth over the past year. More notably, the growth is accelerating: EPS growth over the last quarter (100%) follows growth of 124.7%, 151.6%, and 85.8% in the prior three quarters. The one-year full-year EPS growth is 117%, a large jump from 30.5% the year before. This acceleration is a core signal of the Minervini “Code 33” pattern.
• Revenue Growth & Acceleration: Revenue has grown 34.1% over the trailing twelve months. The most recent quarter saw sales up 21% year-over-year, and the previous quarter was up 78.3%. Revenue has grown consistently, with three of the last four quarters showing double-digit expansion.
• Estimates & Surprises: Encore Capital has beaten EPS estimates in all of the last four quarters, with an average beat of 56.2%. Revenue has also been a clean sweep of four beats. Analysts have responded by raising next-year EPS estimates by 15.9% over the last three months—a positive revision trend that Minervini highlights as a key catalyst.
• Profit Margins: The profit margin has improved over each of the last four quarters, from 13.3% to 18.1% in the most recent period. This improving profitability demonstrates pricing ability and operational efficiency.

These fundamental strengths are not random. Minervini teaches that big earnings attract big attention from institutions. Encore Capital’s accelerating earnings, rising margins, and positive estimate revisions create the fundamental catalyst that can fuel continued price appreciation—making the technical setup more reliable.

ChartMill Technical Report Summary

Our technical analysis report assigns Encore Capital a Technical Rating of 10 out of 10, reflecting excellent long and short-term trends and strong relative performance. The Setup Quality is rated 4 out of 10, which is moderate—meaning the stock is not currently forming a classic tight consolidation pattern. The setup is acceptable but not ideal for an immediate entry; the stock may benefit from a short period of base-building before the next leg higher. Key support zones lie near $83-$85 and $78-$80.

Discover More Candidates

This screen regularly identifies stocks that combine technical strength with accelerating growth. To explore the full list of current candidates, you can access the live screen here: High Growth Momentum + Trend Template Screen.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a licensed financial advisor before making any trading or investment decisions.

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