Perplexity-Mark Minervini Strategy

Mark Minervini Strategy Screener Analysis Your screener demonstrates a solid understanding of Mark Minervini's SEPA (Specific Entry Point Analysis) methodology, but there are several areas where it can be refined to better align with his precise criteria. Here's a comprehensive evaluation with specific improvement recommendations. Strong Elements in Your Current Screener Your screener captures many of Minervini's core principles effectively: Technical Requirements: The moving average conditions (Current price > DMA 50 and DMA 200, DMA 50 > DMA 200) align well with his Trend Template requirements. Your 52-week range criteria (From 52w high < 15% and Up from 52w low > 30%) closely match his specifications of being within 25% of 52-week high and at least 30% above 52-week low. Fundamental Criteria: Your focus on sales and profit growth over multiple timeframes reflects Minervini's emphasis on earnings acceleration and revenue expansion. The ROE and ROCE requirements (both > 15%) align with his preference for efficient capital utilization. Risk Management: The debt-to-equity ratio < 0.5 demonstrates sound risk management principles that Minervini advocates. Areas for Strategic Improvement 1. Earnings Growth Criteria Refinement Minervini specifically looks for accelerating earnings growth with more stringent requirements than your current setup: Quarterly EPS growth: Minimum 25% year-over-year, preferably 30-50% Annual earnings growth: Should show acceleration over 3-5 years with at least 25% average growth Current implementation: Your 15% three-year growth may be too conservative Recommended adjustment: Increase to "Profit growth 3Years > 25%" and add "YOY Quarterly profit growth > 25%" 2. Sales Growth Enhancement While your quarterly sales growth > 20% is appropriate, Minervini emphasizes consistency across timeframes: Quarterly sales growth: Your 20% threshold aligns well Annual sales growth: Consider increasing three-year requirement to 20-25% Missing element: Sales acceleration pattern (current quarter > previous quarter) Recommended addition: "Sales latest quarter > Sales preceding quarter * 1.20" 3. Net Profit Margin Optimization Your NPM > 10% is reasonable, but Minervini focuses more on margin expansion and quality of earnings: Margin trends: Look for expanding margins over time Industry context: Compare margins to industry averages Quality focus: Ensure profits come from core operations, not one-time gains Recommended enhancement: Add "NPM latest quarter > NPM preceding quarter" 4. PEG Ratio Refinement Your PEG < 1.5 threshold needs adjustment: Minervini's preference: Generally looks for PEG ratios closer to 1.0 or below Industry context: High-growth stocks may justify slightly higher PEGs Growth quality: Ensure the growth rate used is sustainable Recommended adjustment: Lower to "PEG Ratio < 1.2" or add additional growth quality filters 5. RSI Criteria Enhancement Your RSI > 50 captures upward momentum, but Minervini's approach is more nuanced: Relative strength: Focus on stocks in top 20-30% of market performance RSI context: Values between 50-70 often signal healthy uptrends without being overbought Market comparison: Compare stock performance to market indices Recommended refinement: Consider "RSI between 50 and 70" and add relative strength ranking 6. Volume Analysis Addition A critical missing element is volume confirmation: Breakout volume: Look for volume spikes during price advances Average volume: Ensure adequate liquidity with minimum daily volume thresholds Volume trends: Increasing volume on up days, decreasing on consolidation Recommended addition: "Volume > Volume 50-day average * 1.4" for breakout confirmation Enhanced Screener Formula Based on Minervini's methodology, consider this refined version: text Sales growth 3Years > 20 AND Profit growth 3Years > 25 AND YOY Quarterly sales growth > 20 AND YOY Quarterly profit growth > 25 AND Return on capital employed > 15 AND Return on equity > 15 AND Debt to equity < 0.5 AND NPM last year > 8 AND NPM latest quarter > NPM preceding quarter AND Current price > DMA 50 AND Current price > DMA 200 AND PEG Ratio < 1.2 AND From 52w high < 25 AND DMA 50 > DMA 200 AND Up from 52w low > 30 AND RSI > 50 AND RSI < 70 AND Volume > Volume 50-day average * 1.2 Market Context Considerations Remember that Minervini's strategy is market-timing sensitive: Stage 2 focus: Best results occur during favorable market conditions Sector rotation: Leading stocks often come from leading sectors Base patterns: Look for proper consolidation patterns before breakouts Implementation Strategy Phase 1: Start with your current screener and gradually implement one or two improvements at a time to test their impact on your results. Phase 2: Monitor the quality of stocks identified and track their subsequent performance to validate the criteria effectiveness. Phase 3: Fine-tune thresholds based on market conditions and your risk tolerance while maintaining the core Minervini principles. Your foundation is solid and demonstrates good understanding of growth investing principles. The suggested refinements will help align your screener more precisely with Minervini's proven methodology while maintaining the flexibility to adapt to different market environments.

by Newskrush