Cadre Holdings Inc (NYSE:CDRE) Emerges as a Compelling CAN SLIM Candidate

The CAN SLIM investment system, created by William O'Neil, uses both fundamental and technical analysis to find high-growth stocks that have strong momentum. This method looks for companies with solid earnings speed, good institutional support, and technical breakout patterns, while also paying attention to the general market trend. The system's acronym stands for important factors: Current quarterly earnings growth, Annual earnings growth, New products or stock price highs, Supply and demand, Leadership position, Institutional support, and Market direction.

Cadre Holdings Inc (NYSE:CDRE) has become a candidate to look at using the CAN SLIM perspective. The Jacksonville-based company that makes safety and survivability equipment for law enforcement, first responders, and military markets became public in November 2021 and has since shown traits that fit with multiple CAN SLIM ideas.

Current Quarterly Performance

The CAN SLIM system highlights strong current quarterly earnings and sales growth as main signs of a company's momentum. Cadre Holdings shows very good performance here:

• Quarterly EPS growth of 200% compared to the same quarter last year
• Quarterly revenue growth of 42.5% year-over-year

These numbers are much higher than O'Neil's suggested minimums of 18-20% for earnings and 25% for sales growth. The large speed-up in both earnings and revenue indicates the company is seeing strong operational momentum and market need for its safety products.

Annual Earnings Strength

In addition to quarterly results, CAN SLIM looks for steady annual earnings growth to confirm companies are not just having temporary surges. Cadre Holdings shows notable long-term profitability:

• Three-year EPS compound annual growth rate of 34.3%
• Return on Equity of 11.5%, which is above the 10% minimum level

This continued growth pattern shows the company has built a lasting business model instead of depending on short-term factors. The ROE number puts Cadre Holdings in the top group of its industry, showing good use of shareholder money.

Technical Leadership and Market Position

The technical analysis view of Cadre Holdings shows several good traits that match CAN SLIM's focus on market leadership:

• Relative strength rating of 88.8, meaning the stock is doing better than almost 89% of all market securities
• Both short-term and long-term trends are positive
• Current price action shows a bull flag pattern, which might present a chance to enter

The high relative strength is especially important in the CAN SLIM method, as O'Neil always stressed investing in market leaders, not followers. This technical strength suggests institutional investors are noticing the company's fundamental progress.

Financial Health and Institutional Support

CAN SLIM checks institutional support and financial soundness to judge continued momentum possibility:

• Institutional ownership of 69.6%, below the 85% level that could suggest limited room for more buying
• Debt-to-equity ratio of 0.91, meeting the system's need for a ratio under 2.0
• Current ratio of 3.59 shows good short-term cash availability

The institutional ownership level finds a middle ground between having professional approval and keeping space for more institutional buying. The acceptable debt level lowers financial risk and allows for operational flexibility.

Complete Assessment

Cadre Holdings shows an interesting profile when looked at through both fundamental and technical views. The company's fundamental analysis shows a business with good profitability numbers, fair value given its growth rates, and solid operational performance. At the same time, the technical analysis points to positive momentum traits and a market leadership position.

The company's focus on necessary safety equipment for important applications gives it some stable qualities while still having growth potential. Their range of products across body armor, explosive disposal equipment, and duty gear serves steady government and institutional markets and also shows development through new products.

Looking for Other Opportunities

For investors wanting to find other companies that fit CAN SLIM criteria, more screening results can be found using our pre-configured CAN SLIM screener. This tool allows for more personalization based on individual risk comfort and investment goals.

Disclaimer: This analysis is for information only and is not investment advice, a recommendation, or an endorsement of any security. Investors should do their own research and talk to financial advisors before making investment decisions. Past performance does not guarantee future results, and all investments have risk, including the possible loss of the original investment.