For investors looking for a methodical way to find leading companies with high growth, the CANSLIM method, created by William O'Neil, stays a key strategy. It joins careful review of company finances with important chart-based signals to find stocks with solid profit trends, support from large investors, and better price action, preferably when the general market is positive. The system's name lists its main parts: Current quarterly profit growth, Annual profit growth, New offerings or price highs, Share availability and trading volume, leading position, Institutional investor support, and the general Market trend.
A recent filter using these ideas has identified Gold Fields Ltd-Spons ADR (NYSE:GFI), a worldwide gold producer, as a possible option for further review by investors focused on growth.
Reviewing the Fundamental "CAN SLIM" Parts
A close look at the company's financial reports shows why it appears in a filter based on O'Neil's growth-oriented rules.
-
Current Quarterly Profits & Sales (The "C"): CANSLIM requires solid, and ideally increasing, latest quarterly results. GFI meets this very well, with large year-over-year increases in its last quarter:
- Earnings Per Share (EPS) Growth (Q2Q): 316.2%
- Revenue Growth (Q2Q): 184.3% These numbers are much higher than the usual minimums the strategy suggests, showing strong recent business performance.
-
Annual Profit Gains (The "A"): The strategy seeks a record of solid growth, not just one good quarter. GFI shows considerable growth over several years, with a 3-year EPS Compound Annual Growth Rate (CAGR) of 72.0%. Also, its Return on Equity (ROE) of 54.5% is much higher than the minimum target, showing very effective use of investor money.
-
Share Dynamics, and Financial Soundness (The "S" & "L"): CANSLIM prefers companies with healthy finances. GFI's Debt-to-Equity ratio of 0.35 shows a careful use of borrowed money, matching the system's liking for controlled debt. More significantly, the stock shows clear leading position (The "L") in price behavior. With a ChartMill Relative Strength (CRS) score of 90.02, GFI is doing better than about 90% of all stocks, a main trait of market leaders the strategy looks for.
-
Institutional Investor Support (The "I"): While ownership by large investors at 59.8% indicates notable professional investor attention, it is still below a point considered too crowded. This allows for more buying by these investors, which can help maintain higher share prices.
Technical and Fundamental Overview
The detailed review reports on ChartMill give a combined picture that backs the filter findings.
The Fundamental Analysis report gives GFI a high score of 8 out of 10, describing it as a company with "excellent" earnings ability and financial condition. It states the stock seems "low-priced" compared to both its sector and the wider market while also "increasing quickly", a mix that is especially interesting. Main advantages pointed out include outstanding earnings margins and returns on investment. You can see the complete details of its financial measures here.
From a price movement view, the Technical Analysis report gives GFI a very high score of 9 out of 10. It confirms the stock is in upward patterns on both recent and longer timeframes and importantly confirms its leading status, stating it is "doing better than 90% of all stocks." The review does note that after a large increase, the stock might need a pause before offering a new good chance to buy, but the basic chart strength is evident. The full chart review and price levels are found here.
Market Setting and Closing Points
The last part of CANSLIM, "M" for Market Trend, tells investors to think about the wider situation. At present, the longer-term trend for the S&P 500 is still up, which usually offers a good setting for using such a growth-oriented strategy, even while shorter-term trends are mixed.
Gold Fields offers an interesting example of a company satisfying a multi-part growth filter. It shows the very high recent profit growth, good historical increase, superior earnings ability, and leading relative price action the CANSLIM method aims to identify. While the company works in the changing metals and mining industry, its present financial measures and chart position match well with the requirements for high-momentum market leaders.
Want to review other stocks that now fit these CANSLIM-based growth requirements? You can use the filter yourself and view the newest findings here.
Disclaimer: This article is for information only and is not investment guidance, a suggestion, or an offer or request to buy or sell any investments. The review uses data thought to be correct, but its precision is not assured. Investors should do their own separate research and think about their personal money situation, risk comfort, and investment goals before any investment choice. Previous results do not guarantee future outcomes.