For investors looking for a methodical way to find leading companies with high growth, the CAN SLIM method, created by William O'Neil, is a foundational plan. It merges detailed company evaluation with important chart-based signals to find stocks with solid profit trends, support from large investment firms, and leading traits, best bought when the general market is rising. A recent filter using this structured process has identified The Vita Coco Company, Inc. (NASDAQ:COCO) as a stock that merits further review.
Evaluating the Fundamental "CAN SLIM" Match
The heart of the CAN SLIM plan requires outstanding recent and yearly profit growth, good earnings, and a solid financial position. A look at COCO's fundamental numbers, shown in its full fundamental analysis report, indicates a match with several key requirements:
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Current Quarterly Earnings & Sales (The "C"): The method searches for increasing quarterly earnings per share (EPS) and sales growth. COCO shows 25% year-over-year EPS growth and a notable 37% sales growth for its latest quarter, easily passing the usual minimum levels and pointing to strong recent business performance.
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Annual Earnings Increases (The "A"): CAN SLIM aims for steady yearly growth. COCO displays a solid 3-year EPS compound annual growth rate (CAGR) of about 39%, well above the plan's standard. This is supported by a Return on Equity (ROE) of 21.4%, which shows effective use of investor money and passes the minimum 10% commonly desired.
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Supply & Demand / Financial Health (The "S"): An important element here is a firm financial position with acceptable debt. COCO is strong here with a Debt-to-Equity ratio of 0.0, meaning no debt requiring interest payments. This financial strength offers good operational freedom and lowers risk, a positive quality for growth investors.
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Institutional Sponsorship (The "I"): The plan favors stocks with ownership by large investment firms that is significant but not too high, leaving space for more purchases. COCO's institutional ownership is about 84%, which is under the 85% limit used in our filter. This points to good institutional interest while not reaching a level that might restrict future buying from big funds.
Price Performance Leadership and Market Standing
The "L" in CAN SLIM means "Leader or Laggard," stressing the value of comparative price performance. This is where chart study becomes important. COCO's technical analysis report shows a stock performing as a definite market leader.
- Relative Strength: COCO has a relative strength rating of 92.45, indicating it has done better than over 92% of the overall market in the last year. This is a classic trait of a market leader and is a strict requirement in exact CAN SLIM filters, which usually demand a rating over 75.
- Price Trend and Movement: The stock is in a clear upward trend, trading close to its highest prices in the past year. The technical report states both near-term and longer-term trends are good, and the stock is now showing a bull flag shape—a pause within a rising trend often seen as a possible continuation signal. This matches the CAN SLIM idea of buying stocks as they move out of stable periods to new high prices.
Summary of Key Ratings
Bringing the information together, COCO shows a notable outline:
- On fundamental measures, it is marked by excellent health and earnings scores, with very good growth numbers. The main note is its price relative to earnings, which seems high on standard measures—a typical trait of companies with fast growth.
- On chart-based measures, the stock is firm, with a high score of 9 out of 10. It displays leadership through better relative strength and is trading in a steady upward trend, presenting a clear chart pattern for a possible buying point.
The "M" – Market Condition
A last, vital rule of the CAN SLIM system is to follow the general market condition ("M"). The plan suggests investing money mainly during verified market advances. At present, the S&P 500 shows a positive near-term trend, which offers a better environment for using a growth-focused plan like CAN SLIM.
Finding More CAN SLIM Prospects
The Vita Coco Company's match with several CAN SLIM filters makes it a noteworthy example for growth investors. For those wishing to do their own study and find other firms that meet similar strict requirements, you can view and adjust the pre-set CAN SLIM screening tool used in this review here: View the CANSLIM Stock Screen.
Disclaimer: This article is for information and learning only. It is not meant as investment guidance, a suggestion, or an offer or request to buy or sell any securities. The review of The Vita Coco Company, Inc. (COCO) is based on data and a particular investment method; past results do not guarantee future outcomes. Investors should perform their own complete research, think about their personal financial condition and risk comfort, and talk with a qualified financial advisor before making any investment choices.
