DRDGOLD LTD-SPONSORED ADR (NYSE:DRD) Stands Out in CAN SLIM Growth Screen

In the world of growth investing, few methods have lasted as long or been used as widely as the CAN SLIM system, introduced by William O’Neil. This approach joins careful fundamental study with important technical signs to find leading companies with solid growth possibility. The system’s acronym explains its main parts: Current quarterly earnings speed increase, Annual earnings growth, New products or highs, Supply and demand forces, Leadership status, Institutional backing, and overall Market direction. By searching for stocks that fit these joined fundamental and price performance measures, investors try to find likely choices ready for large price changes, especially during good market times.

A recent search using this method has found DRDGOLD LTD-SPONSORED ADR (NYSE:DRD), a South African company focused on the retreatment of surface gold tailings. On several of the measurable CAN SLIM parts, DRD shows a notable profile that calls for more study from growth-focused investors.

Fitting the CAN SLIM Fundamentals

The "C" and "A" in CAN SLIM require solid current and annual earnings growth, which are signs of a company building speed. DRD’s recent financial results are strong here.

• Current Quarterly Growth: The company reported a very high 203% year-over-year growth in earnings per share (EPS) for its latest quarter, well above the system's common lowest point of 20-25%. Also, quarterly sales growth rose by over 141%.
• Annual Earnings Increases: With a three-year EPS compound annual growth rate (CAGR) of about 26%, DRD meets the 25% lowest growth looked for in yearly results.
• Profitability and Efficiency: The system notes high return on equity (ROE) as a mark of good management. DRD’s ROE of 36.2% is very good, showing the company is making strong profit from money shareholders invested.

These numbers, shown in the full fundamental analysis report, describe a company in a strong growth period. The "N" for new highs is also applicable, as the company's work in gold retreatment is a specific and effective area within the mining industry.

Showing Market Leadership and Backing

The "L" and "I" parts focus on how the market views the stock. Leadership is judged by relative strength (RS), which matches a stock’s price movement to the wider market. Institutional backing looks for ownership by professional investment firms, but not at very high levels that might reduce future purchasing.

• Leader, Not a Laggard: DRD has a very high relative strength rating of 98.7. This means its price movement over the past year has been better than nearly 99% of all stocks, a clear mark of market leadership that fits the CAN SLIM idea.
• Institutional Backing: With institutional ownership near 15%, DRD matches the form of a company that is recognized by institutions but not heavily owned by them. This allows space for more institutional purchasing, which can add to upward price movement.

Technical and Valuation Setting

From a technical view, DRD’s chart activity supports the fundamental report. The stock is in a clear upward trend on both short and long time periods, trading above its important average prices. This positive technical state, together with a mostly positive market trend for the S&P 500, meets the "M" (Market Direction) part of CAN SLIM, pointing to a helpful setting for growth stocks. The technical analysis report gives DRD a high rating of 10/10, noting its steady results across time periods.

Even with its fast growth, DRD’s price measure does not seem too high. It trades at a P/E ratio near 13.8, which is lower than both the wider S&P 500 and the average for its industry. When joined with its high growth rate, this fair price measure can be interesting to investors looking for growth at a sensible price.

A Choice for More Study

It is important to state that while DRD rates well on many number-based CAN SLIM filters, investors should think about the whole view. The company works in an industry tied to gold prices that changes with cycles, and its business includes certain environmental and working risks found in mining. The CAN SLIM method also notes finding correct chart patterns and entry points, which needs separate technical study.

For investors wanting to find other companies that fit this growth-focused form, the original CAN SLIM search that found DRD can be found here. This search tool gives a changing list of stocks meeting the main earnings, growth, and strength parts discussed.

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Disclaimer: This article is for information only and is not investment guidance, a suggestion, or an offer to buy or sell any security. The study uses data and a set search method; it does not include personal financial situations, risk comfort, or investment goals. Investors should do their own full research, including looking at SEC filings, earnings reports, and other related documents, and think about talking with a qualified financial advisor before making any investment choices. Past results are not a guide for future results.