Investors using a systematic method to find leading companies with high growth have long used the CAN SLIM system, made popular by William O'Neil. This method uses both fundamental and technical study to find companies with strong earnings improvement, solid yearly growth, and notable institutional interest, all while focusing on buying during positive market periods. The aim is to locate stocks that are both fundamentally healthy and showing clear price strength and sector leadership.
A recent filter using this system has pointed to DHT HOLDINGS INC (NYSE:DHT), an owner and operator of Very Large Crude Carrier (VLCC) tankers. The company's latest financial results and technical setup indicate it may fit several main CAN SLIM principles, presenting a strong case for growth-focused investors to perform more research.
Fitting the CAN SLIM Standards
The CAN SLIM letters describe a particular group of filters. Here is how DHT Holdings measures against several of the system's central numerical needs:
- Current Quarterly Earnings & Sales (The "C"): A key part of the system is solid latest quarterly results. DHT shows a quarterly earnings-per-share (EPS) increase of 20.6% and a sales increase of 37.7% versus the same quarter last year. This meets and goes beyond the usual minimum levels of 20-25% looked for by CAN SLIM investors, showing forceful recent business momentum.
- Annual Earnings Gains (The "A"): The system wants a history of growth, not just one quarter. DHT displays a 3-year EPS compound annual growth rate (CAGR) of 37.0%, clearly above the 25% standard. Also, its Return on Equity (ROE) of 18.6% is higher than the minimum 10% need, showing good use of shareholder money.
- Supply and Demand & Leadership (The "S" and "L"): CAN SLIM prefers companies with a reasonable share structure and clear sector leadership. DHT has a careful debt-to-equity ratio of 0.34, much lower than the filter's limit of 2, showing financial stability. More significantly, its ChartMill Relative Strength (CRS) score is a very high 93.75. This means the stock's price action has done better than almost 94% of the market, a clear mark of leadership that is important for the "L" in CAN SLIM.
- Institutional Sponsorship (The "I"): The method appreciates stocks that are being found by institutional investors but are not yet heavily held by them. DHT's institutional ownership is 65.8%, which is under the 85% maximum used in the filter. This indicates there is still space for more institutional purchases, which can give continued upward support to the share price.
Fundamental and Technical Condition Review
Beyond the specific filter checks, a wider view of DHT's financial and chart condition gives background. The company's fundamental analysis report gives it a firm score of 6 out of 10. The report notes very good profitability and financial condition numbers, including high margins and a solid current ratio. While historical growth has been poor—a point for care—analysts expect a notable pickup, with future EPS growth forecast above 26% each year. The price seems fair compared to both its industry and the wider market, especially when considering this expected growth.
The technical view is particularly firm. DHT's technical analysis report gives it a top rating of 10 out of 10. The stock is in a confirmed upward trend on both short and long-term views and is now trading near a 52-week high, a good sign within the CAN SLIM structure. The high relative strength score confirms this technical leadership. The main point for care from the technical report is that the recent fast rise may lead to a time of pause, indicating possible investors could watch for a clearer moment to enter.
Market Setting and Final Points
The "M" in CAN SLIM means Market Direction, reminding investors that even the firmest stocks can have difficulty in a negative overall market. At present, the S&P 500 shows a positive short-term trend, which gives a more helpful setting for examining growth-focused ideas like DHT. However, this element needs constant watching.
For investors wanting to use this structured method to find other possible leaders, the set O'Neill CANSLIM High Growth screen used to find DHT can act as a beginning for more study.
Disclaimer: This article is for information only and does not make up financial guidance, a support, or a suggestion to buy, sell, or hold any security. Investing has risk, including the possible loss of original money. You should do your own complete research and think about talking with a qualified financial advisor before making any investment choices.
