Given the current state of the market, this is an ideal time to revisit the trend templates. What follows are a few quotes from Mark Minervini on his thought process and how he incorporates the templates into his own research routine. The information is based on an interview with Mark that appeared in a previous edition of MarketSmith’s Q1 Stock Guide.
In traditional CAN SLIM, strong earnings and sales are key. With that said, there are many excellent growth stocks that are good candidates for a watchlist, yet they have minimal or no earnings to date.
Many of my screens start with a similar set of criteria:
Price over $20
20,000,000 in dollar volume
Composite Rating of 90+
I find this is a solid baseline, adjust as you like. With 20,000,000 in dollar volume, you are ensured there is adequate liquidity.
For this particular screen, notice the reference to sales acceleration for the last three quarters. For the most recent quarter sales, I’m looking for an increase of at least 25%.
FVRR is a good example of a stock from the result set that has strong sales growth, a monster move over the past few months, yet only one quarter of earnings posted.
Last week on IBD’s Investing Podcast, Irusha Peiris interviewed Mark Minervini. As always, there was a lot great information to be had. One discussion that I found particularly intriguing was the integration of Mark’s trend templates into MarketSmith, more specifically, the option to create your own custom screens using the results of the trend template as the baseline set of stocks.