For investors wanting a methodical way to find leading companies with high growth, the CANSLIM method, created by William O'Neil, stays a key strategy. It mixes detailed examination of company finances with important chart-based signals to find stocks with good profit momentum, support from large investment firms, and leading traits, all while the general market trend is positive. This structured system tries to identify stocks in their strongest periods of expansion.
A recent filter using this method has identified AGNICO EAGLE MINES LTD (NYSE:AEM) as a stock for more detailed look. The Canadian gold mining company, with a group of mines like the Canadian Malartic site and Detour Lake, seems to match a number of central ideas of the CANSLIM approach.
Looking at the Fundamental "CAN" Points
The first three letters of the CANSLIM name concentrate on present and yearly profit strength, and the company's new or leading role. Agnico Eagle's latest financial results display notable momentum in these parts.
- Current Profits & Sales (C): The approach requires large or speeding up quarterly profits and sales. Agnico Eagle states a very large 113.5% year-over-year rise in earnings per share (EPS) for the latest quarter, well above the common lowest limit of 20-25%. Also, quarterly sales growth was 60.3%, showing strong sales momentum that backs the profit jump.
- Yearly Profit Gains (A): A history of continued growth is vital. Over the last three years, Agnico Eagle has reached a compounded yearly EPS growth rate near 53.7%, showing a steady and solid growth path that goes beyond the method's liking for 25-50% yearly rises.
- New Offerings, New Peaks (N): While a gold mining firm may not be a "new" field, the "N" also includes companies hitting new price peaks, showing the market sees its strength. This part is best judged through chart study, which we will see next.
Reviewing the "SLIM" Elements
The last part of the method looks at share availability and demand, leadership, and the actions of large investment firms and the market.
- Availability, Demand & Money Health (S): Agnico Eagle shows a very firm financial position, a main part of looking at share availability. The company's debt-to-equity ratio is a very small 0.01, showing almost no use of debt for funding and putting it in the best group in its field for money stability.
- Leader or Follower (L): CANSLIM requires investing in market leaders, not followers. Agnico Eagle's relative strength score of 95.65 means it has done better than about 96% of all stocks in the market over the past year. This very high score is a sign of the market leadership the method looks for.
- Large Investment Firm Support (I): The method likes stocks with rising ownership by large firms, but not so high that all possible buying is done. Agnico Eagle's large firm ownership is stated at 72.4%, which is under the 85% top limit often used in filters, meaning there may still be space for more large firm buying.
- Market Path (M): The last rule is to follow the general market trend. At this time, the S&P 500 shows an upward near-term trend, which matches the CANSLIM idea of investing mainly during rising market times.
Chart and Fundamental Overview
Agnico Eagle's picture is made clearer by its separate scores. The company's fundamental analysis report gives a 6 out of 10, pointing out very good profit-making and money health, though it mentions expected near-term limits to growth. Its profit-making measures are firm, with a Return on Equity (ROE) of 14.67%, meeting another important CANSLIM check for good use of owner money.
From a price movement view, the technical analysis report gives a full score of 10 out of 10. The report states both short and long-term trends are upward, the stock is priced in the higher part of its 52-week span, and it finds a reasonable price formation with prices holding near recent peaks.
A Stock for More Study
Based on the exact measures taken from the CANSLIM filter, Agnico Eagle Mines offers a notable example. It shows very fast recent quarterly growth, a firm multi-year profit trend, top market leadership through relative strength, a very firm financial position, and suitable large firm interest, all while the market trend is up. While the company works in a field tied to economic cycles and has predicted growth difficulties, its present match with the momentum-focused CANSLIM points is significant.
For investors wanting to see other stocks that meet similar strict growth and momentum checks, the ready-made O'Neill CANSLIM High Growth screen can be a beginning for more study.
Notice: This article is for information only and is not financial guidance, a support, or a suggestion to buy, sell, or keep any investment. The CANSLIM method has risk, and past results do not guarantee future outcomes. Investors should do their own complete study and think about their personal money situation and risk comfort before making any investment choices.
