For investors wanting a methodical way to find high-growth market leaders, the CANSLIM method created by William O’Neil stays a central strategy. It mixes strict fundamental study with important technical signs to find stocks with solid earnings momentum, institutional support, and leading traits, all while noting the significance of the general market's condition. The aim is to locate companies not only with very good financials, but with the market attention to push their stock prices upward.
A recent filter using this method has identified Cadre Holdings Inc (NYSE:CDRE) as a possible choice. The Jacksonville-based maker of safety and survivability gear for law enforcement, military, and first responders seems to match several main CANSLIM ideas, offering a strong case for more review by growth-oriented investors.
Reviewing the CANSLIM Criteria
The CANSLIM acronym describes a particular group of filters. Here is how Cadre Holdings measures against the main numerical standards from our filter:
- C - Current Quarterly Earnings & Sales: The method requires large, speeding growth in the newest quarter. Cadre Holdings performs strongly here, with a striking 200% year-over-year EPS growth and a solid 42.5% increase in revenue for the last quarter. This fast momentum in both profit and sales is a main support of the CANSLIM method.
- A - Annual Earnings Increases: Lasting growth is important. The company displays a good history, with a 3-year EPS compound annual growth rate (CAGR) of 34.3%, easily passing the strategy's common 25-50% mark. Also, its Return on Equity (ROE) of 13.3% shows effective use of shareholder money and meets the lowest limit for profitability.
- L - Leader or Laggard: CANSLIM looks for market leaders, not poor performers. Cadre Holdings shows clear leadership in price performance, having a Relative Strength rating of 80.89. This means it has done better than over 80% of the wider market—a clear signal of institutional preference and momentum that the strategy values.
- I - Institutional Sponsorship: The strategy wants growing but not too high institutional ownership. With institutional ownership near 74%, Cadre Holdings is in a possible favorable position: it has notable professional support, yet there is still space for more institutions to find and buy the stock, which might give extra buying force.
- S - Supply and Demand: Financial condition is important for continuing growth. The company keeps a Debt-to-Equity ratio of 0.87, which is under the filter's limit of 2. This shows a workable amount of debt and matches the system's liking for companies not weighed down by borrowing.
Fundamental and Technical Overview
A look at Cadre Holdings' fundamental analysis report shows a varied but mostly good view. The company gets a firm total rating, with special force in profitability and growth. Margins are growing, and both past and expected future earnings growth are solid. The main areas of care focus on valuation measures, which seem high on a pure basis, and parts of financial condition, like its use of debt. However, inside its Aerospace & Defense industry, the stock is often seen as more fairly priced.
The technical analysis report gives the stock a high rating, seeing that both its short-term and long-term directions are positive. The stock is trading in the higher part of its 52-week range and has done much better than the market over the last year. While the report notes the present chart pattern may be a bit unsteady for a perfect entry, the firm base direction and high relative strength are clear technical pluses that back the CANSLIM idea.
Market Setting and Last Points
A crucial "M" in CANSLIM is Market Direction. The present situation, with the S&P 500 in a positive long-term and short-term direction, gives a supporting background for looking at growth-focused leaders like Cadre Holdings. The strategy firmly suggests not buying even the top choices in a down market.
Cadre Holdings shows a picture that matches several strict growth investing rules. It shows fast recent quarterly growth, a good yearly earnings history, better market-relative strength, and acceptable institutional and debt pictures. While investors should always think about valuation and watch the wider market direction, the company's fundamentals and technicals indicate it is performing well and being recognized by the market.
Interested in finding other stocks that match this growth-focused model? You can use the same CANSLIM filter with this pre-set link to see more possible choices.
Disclaimer: This article is for information only and is not financial advice, a suggestion, or a deal or request to buy or sell any securities. The study shown is based on data and sources thought to be dependable, but its correctness cannot be sure. Investors should do their own separate study and talk with a qualified financial advisor before making any investment choices.
