For investors wanting a methodical way to find leading companies with high growth, the CAN SLIM method, created by William O'Neil, stays a key strategy. It joins careful study of company finances with important chart indicators to find stocks with solid profit trends, support from professional investors, and leading traits, preferably when the overall market is positive. This structured system helps select firms that are both financially healthy and gaining attention and purchases from the market.
A recent filter using this method has identified Innovative Solutions & Support Inc. (NASDAQ:ISSC), a company that makes flight navigation and cockpit systems for commercial and military aircraft. A detailed look shows that ISSC matches several central parts of the CAN SLIM idea, making a strong argument for more study by investors focused on growth.
Matching the CAN SLIM Standards
The effectiveness of the CAN SLIM system comes from its detailed list of checks. ISSC seems to meet several of these numerical requirements, which are made to find businesses with speeding operational momentum.
- Current Quarterly Earnings & Sales (The "C"): CAN SLIM focuses on solid, and ideally speeding, recent quarterly results. ISSC reports quarterly earnings per share (EPS) growth of 57.1% and sales growth of 44.6% versus the same quarter last year. These numbers easily pass the common targets used by followers, showing forceful short-term business momentum.
- Annual Earnings Increases (The "A"): The method searches for a history of growth, not just one quarter. ISSC displays a solid 3-year EPS compound annual growth rate (CAGR) of about 39.9%, proving continued profit growth. Also, its Return on Equity (ROE) of 24.2% shows very efficient use of investor money, another important sign of good growth.
- Supply and Demand & Institutional Sponsorship (The "S" & "I"): Looking at the balance sheet, ISSC keeps a careful debt position with a Debt-to-Equity ratio of 0.34, much lower than the filter's limit. This points to financial stability and less risk. At the same time, ownership by professional firms is 47.6%, which is in a zone that indicates professional attention without being too full—a favorable area where more discovery by these firms could lead to buying support.
- Leader or Laggard (The "L"): Maybe one of ISSC's most notable chart-based qualifications is its leading price performance. The stock has a ChartMill Relative Strength (CRS) rating of 97.4, meaning it has done better than over 97% of the market. This leading quality is essential to CAN SLIM, which states that the best financial stories are verified by better price movement.
Fundamental and Technical Condition Review
Looking past the filter-specific numbers, a wider view of ISSC's reports supports its position.
The company's fundamental rating of 7/10 points out very good profitability and financial soundness. Margins are solid and getting better, returns on capital are better than most similar companies, and the firm has no cash flow or debt worries. While its price is not very low, it is fair compared to both its industry and the wider market, particularly when weighing its high growth and quality measures. You can see the full details in the detailed fundamental analysis report.
On the chart, ISSC is even stronger, receiving a top rating of 10/10. Both its recent and longer-term price directions are clearly positive. The stock is priced near its highest point in the past year, a feature liked by the "N" (New Highs) part of CAN SLIM, and this strength has been backed by higher trading activity. The main warning from the chart study is that the recent fast rise has been uneven, indicating a time of settling might give a more orderly chance to buy. The full chart view is in the technical analysis report.
A Subject for More Study
Innovative Solutions & Support Inc. offers a clear case of a stock that meets a strict, multi-part growth filter. Its forceful mix of speeding quarterly performance, solid yearly growth, excellent profitability, simple balance sheet, and market-leading relative strength marks it as a significant subject for investors using methods like CAN SLIM. The present positive directions in both the stock and the wider S&P 500 give the supportive "M" (Market Direction) setting the method needs.
For investors wanting to find other firms that match this growth-oriented outline, the ready-made O'Neill CANSLIM High Growth screen can act as a beginning for more research.
Disclaimer: This article is for information and learning only and is not investment guidance, a suggestion, or a bid to buy or sell any securities. The study shown is based on supplied data and should not be the only ground for any investment choice. Investors must do their own investigation and talk with a qualified financial advisor before making any investment decisions. Previous results do not guarantee future outcomes.
