The CAN SLIM investment methodology, created by William O'Neil, integrates fundamental and technical analysis to find high-growth companies with good institutional backing. This structured process concentrates on stocks showing quickening earnings and sales growth, solid yearly earnings improvements, new products or services, and positive supply-demand features. The method highlights market leadership using relative strength analysis and needs positive market conditions for the best entry timing.
Fundamental Strength
CADRE HOLDINGS INC (NYSE:CDRE) shows positive fundamental traits that match CAN SLIM needs. The company's latest financial results display very good growth numbers:
- Quarterly EPS growth of 200% versus the same quarter last year
- Quarterly revenue growth of 42.5% year-over-year
- Three-year EPS compound annual growth rate of 34.3%
- Return on equity of 13.3%, above the 10% minimum level
These numbers meet the "C" and "A" parts of CAN SLIM, which require quickening quarterly earnings and solid yearly earnings improvements. The large quarterly EPS growth points to momentum, while the steady three-year growth pattern indicates lasting business growth. The ROE number shows efficient use of shareholder capital, another important factor in the method.
Technical Positioning
From a technical viewpoint, CADRE HOLDINGS displays several positive traits:
- Relative strength rating of 90.65, showing it does better than about 91% of all stocks
- Long-term trend stays positive in spite of recent consolidation
- Trading in the higher part of its 52-week range
- Good performance compared to industry peers, doing better than 78% of aerospace and defense stocks
The high relative strength directly relates to the "L" part of CAN SLIM, which looks for market leaders instead of laggards. This technical strength indicates institutional accumulation and market acknowledgment of the company's fundamental progress.
Institutional Support and Financial Health
The company maintains suitable institutional traits for CAN SLIM review:
- Institutional ownership of 69.6%, under the 85% limit
- Debt-to-equity ratio of 0.87, much lower than the maximum 2.0 requirement
- Current ratio of 3.64 indicating good short-term liquidity
These measurements satisfy the "I" and "S" parts, representing institutional sponsorship and supply-demand features. The institutional ownership level shows professional investor interest without becoming too crowded, while the careful debt levels offer financial flexibility.
Complete Analysis
According to the fundamental analysis report, CADRE HOLDINGS scores 6 out of 10, with specific strength in profitability metrics. The company displays very good margins and returns compared to industry peers, although there are small worries about financial health. The technical analysis report rates the stock 7 out of 10, noting steady overall performance in spite of recent consolidation. The setup quality score of 7 implies the stock offers a acceptable technical pattern for possible entry.
The company's place in the safety and survivability equipment market gives a defensive growth trait, serving law enforcement, military, and first responder segments through recognized brands like Safariland and Med-Eng. This industry position offers some safety during economic uncertainty while keeping growth potential.
Market Context
With the S&P 500 displaying a positive short-term trend and neutral long-term trend, market conditions give a acceptable setting for CAN SLIM use. The method stresses the significance of market direction (the "M" part), and present conditions do not show major headwinds for growth stock investing.
For investors wanting to find more companies that fit CAN SLIM standards, the predefined screener configuration gives continuous screening based on these settings.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions. Past performance does not guarantee future results, and all investments carry risk including potential loss of principal.
