Mark Minervini’s strategy combines strict technical trend-following rules with a focus on accelerating fundamentals to identify stocks that are just beginning major growth runs. The core idea is to only consider stocks already in a confirmed uptrend (Stage 2) that are also demonstrating improving earnings and sales momentum. This article examines WD-40 CO (NASDAQ:WDFC), a stock that emerged from a combined screen for the Minervini Trend Template and High Growth Momentum, and evaluates its fit for this methodology.

Meeting the Trend Template Requirements

The first gate for any Minervini candidate is the technical Trend Template, which ensures the stock is in a strong, healthy uptrend with institutional support. WD-40 Co. passes all critical checks, as evidenced by its moving average alignment and price structure.

• Moving Average Alignment: The current price of $249.40 is comfortably above the 50-day SMA ($221.14), the 150-day SMA ($218.66), and the 200-day SMA ($212.94). More importantly, the key averages are stacked correctly: the 50-day SMA is above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This "perfect stack" is a hallmark of a sustained Stage 2 uptrend, indicating that short-term, intermediate, and long-term buyers are all in control.
• Uptrend Confirmation: All three major moving averages (50, 150, and 200-day) are currently rising. This confirms the trend is persistent and not a temporary spike. The 200-day SMA, the ultimate benchmark for long-term health, has moved from $212.69 to $212.94, continuing its upward trajectory.
• Price Proximity to Highs and Lows: The stock’s 52-week range is $175.38 to $298.90. The current price is 42% above the 52-week low, exceeding the 30% minimum threshold, indicating a strong recovery from its lows. It is also trading within 17% of its 52-week high, which places it in the upper quartile of its yearly range, a zone where leading stocks often set up for the next leg higher.
• Relative Strength: With a Relative Strength (RS) rating of 76.34, the stock outperforms over three-quarters of the market. While Minervini often prefers an RS score above 80, a rating of 76 still indicates strong relative demand, particularly within its industry, where it ranks in the top 28% of the 13 stocks in the Household Products group.

Fundamental Support for High Growth

Beyond the chart, the Minervini strategy demands fundamental strength to support the price move. The goal is to find companies where earnings and sales are accelerating, providing the "fuel" for the stock to continue climbing. WD-40 Co. shows several compelling characteristics in this regard.

• Earnings Growth and Acceleration: The most recent quarter (Q2Q) delivered an impressive 45.5% earnings per share (EPS) growth compared to the same quarter last year, a significant acceleration from the previous quarter's 13.6% and the year-ago quarter's 26.8%. This pattern of sequential quarterly acceleration is exactly what Minervini looks for. Furthermore, EPS growth over the trailing twelve months (TTM) stands at a solid 20.1%, and the last full fiscal year showed 13.7% growth, accelerating from 6.0% in the prior year.
• Sales Growth: Revenue growth is also healthy, with the last quarter showing a 24.3% increase year-over-year. The TTM revenue growth is 10.2%. This combination of rising sales and accelerating EPS is a powerful signal that the company's growth is genuine and not just a result of cost-cutting.
• Earnings Quality and Surprises: The company has beaten earnings estimates in 3 of the last 4 quarters, with an average surprise of over 13%. This shows that the business is consistently exceeding analyst expectations, a key catalyst that can drive institutional buying and push the stock higher.
• Improving Profit Margins: Profit margins are clearly trending in the right direction. The most recent quarter’s profit margin of 15.4% is the highest in the last four quarters, showing a consistent improvement from 12.9% (Q-3), 11.3% (Q-2), and 12.5% (Q-1). This demonstrates increasing operational efficiency and pricing power, both traits of a high-quality growth company.

Technical Setup and Report Summary

The technical analysis report assigns WD-40 Co. a strong Technical Rating of 8 out of 10, reflecting its positive short-term and long-term trends. The Setup Rating is 6 out of 10, indicating that while the stock has been consolidating and volatility is reducing, a precise entry point may still be forming. The report identifies a key resistance zone near $264.92 and a strong support zone between $239.41 and $249.39. While the stock is currently trading in the middle of its recent monthly range and has lagged the S&P500’s push to new highs, the underlying technical structure, combined with its accelerating fundamentals, creates a potential high-growth candidate.

For investors and traders looking for more stocks that meet these demanding criteria, explore the latest results from the combined High Growth Momentum and Trend Template screen.

Discover more potential Minervini-style candidates here.

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 analysis before making any trading decisions.

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