Investors using a method to find high-growth market leaders have long used the CAN SLIM system, created by William O'Neil. This plan joins strict fundamental study with important technical signs to find stocks with solid earnings momentum, institutional support, and better relative price strength. The aim is to locate companies showing strong growth in a good market setting, getting ready for possible leadership during rising market periods.
A recent filter using the main CAN SLIM rules has identified Bel Fuse Inc-Cl B (NASDAQ:BELFB) as a stock needing more study. The company, which designs and makes parts that supply electricity, safeguard, and link electronic circuits, seems to match several parts of the plan.
Matching the Main CAN SLIM Fundamentals
The "C" and "A" in CAN SLIM look at current and yearly earnings growth. Bel Fuse shows very strong recent growth, a main requirement for the system.
- Current Quarterly Earnings & Sales (C): The company reported a very large 111.1% year-over-year rise in EPS for its latest quarter, well above the usual CAN SLIM minimum of 18-20%. Quarterly sales growth was also strong at 44.8%, showing good top-line momentum with bottom-line growth.
- Annual Earnings Increases (A): Over a longer period, Bel Fuse's 3-year compounded annual EPS growth rate is 48.6%, much higher than the 25% level often used in filters. This shows the recent strength is not a single event but part of a continued pattern of high profit growth.
The "L" and "I" rules stress leadership and institutional ownership. Bel Fuse also shows good numbers here.
- Leader or Laggard (L): With a ChartMill Relative Strength score of 96.2, the stock is doing better than over 96% of the wider market. This very good relative price performance is a sign of market leaders looked for by the CAN SLIM method, meaning the stock's fundamental strength is being seen and valued by investors.
- Institutional Sponsorship (I): Institutional ownership is noted at 45.0%, which is much lower than the 85% maximum often used in filters. This means there is still space for more institutional purchasing, which can give continued demand and price support as more funds learn about the company.
Other fundamental reviews match the plan's focus on financial condition and efficient management. The company's Return on Equity (ROE) of 15.2% is above the minimum need and shows good use of shareholder money. Also, a Debt-to-Equity ratio of 0.53 is safely under the filter's limit of 2, suggesting a careful balance sheet without high debt.
Technical and Fundamental Summary
From a technical view, Bel Fuse is in a good position. The stock gets a full technical score of 10 from ChartMill, with both its long-term and short-term trends scored as good. It is trading near its 52-week high, which fits the "New Highs" part of the CAN SLIM "N" rule, indicating momentum. However, the technical study report mentions that recent price changes may mean investors should look for a more stable point to enter, a careful thought for any plan focusing on controlled buying.
The fundamental study report gives Bel Fuse a good score of 7 out of 10. It notes an "excellent profitability score" from solid margins and returns on capital, together with "strongly growing" earnings. While there are small comments on financial health, the general view is of a profitable company seeing solid growth, which is trading at a price that is fair compared to its industry group and future growth projections.
For a more detailed look, you can see the complete Technical Analysis Report and Fundamental Analysis Report for BELFB.
A Stock for More Study
Based on the number-based rules from the CAN SLIM system, Bel Fuse Inc shows a strong profile. It displays the strong earnings growth and high relative strength that are key parts of the plan, backed by good profitability and acceptable debt. The stock's technical condition confirms a positive trend, though the time to enter needs thoughtful review.
It is key to recall that a filter result is a beginning for study, not a final suggestion. The "N" rule, which involves newer products, services, or management, needs non-number based review beyond the data. Investors would need to judge if Bel Fuse's place in connectivity, power, and magnetic solutions shows the type of new or needed role in changing markets that leads to long-term growth.
This CAN SLIM filter can be used actively to find other possible stocks. You can reach and change the active filter here.
Disclaimer: This article is for information and learning only. It is not investment advice, a suggestion, or an offer to buy or sell any security. The CAN SLIM system includes risk, and past results of a filter method or a specific stock do not show future outcomes. Investors should do their own complete study and think about their personal money situation and risk comfort before making any investment choices.
