For investors looking for a disciplined way to find leading companies with high growth, the CAN SLIM method, created by William O'Neil, is a fundamental strategy. It joins careful study of company finances with important chart-based signals to find stocks with solid profit trends, support from large investment firms, and better price performance, preferably when the general market is doing well. The system's name explains its main parts: Current quarterly earnings speed, Annual earnings increases, New products or price highs, Supply and demand, Leadership position, Institutional ownership, and the general Market trend.
A recent filter using these ideas has identified Kinross Gold Corp (NYSE:KGC) as a stock that merits more review by investors focused on growth.
Fitting the CAN SLIM Standards
A main advantage of the CAN SLIM system is its need for clear, measurable growth. Kinross Gold seems to perform well on a number of these financial points:
- Current Quarterly Earnings & Sales (The "C"): The system requires large or speeding quarterly growth. Kinross states a very large 235% year-over-year increase in earnings per share (EPS) for the latest quarter, greatly exceeding the common minimum of 20-25%. Also, sales growth of almost 43% is above the standard, showing strong revenue momentum.
- Annual Earnings Gains (The "A"): CAN SLIM searches for a record of large yearly growth. Kinross displays a solid 3-year EPS compound annual growth rate (CAGR) above 100%, which is much higher than the recommended minimum of 25-50%. This shows continued profit growth, not just a one-time quarterly event.
- Leader or Laggard (The "L"): This is a key chart-based part of the method, stressing that a stock must have not only sound finances but also market recognition. Kinross has a ChartMill Relative Strength (CRS) score of 95.95, meaning it has done better than about 96% of all stocks in the last year. This puts it clearly in the market "leader" group, a required feature for CAN SLIM stocks.
- Institutional Sponsorship (The "I"): The method prefers stocks with ownership by large firms, as this can give steadiness and demand, but cautions against too much ownership which reduces future demand. Kinross's institutional ownership is about 67%, which is in an acceptable area, it shows notable support without being too full.
- Supply, Demand & Financial Condition (The "S"): CAN SLIM suggests sound company finances. Kinross shows a very low debt-to-equity ratio of 0.16, much under the filter's limit of 2.0, showing little dependence on debt and sound financial condition. A high Return on Equity (ROE) of 31.6% further indicates effective use of investor money.
Financial and Chart-Based Overview
The given reports present a combined look at Kinross's investment picture. The fundamental analysis report gives a score of 7/10, noting "excellent profitability" and "great financial health." It mentions strong points like industry-best return measures and growing margins, compared to a price that seems low next to its industry and the wider market. The primary point of caution mentions predicted slower growth in future years.
The technical analysis report also gives a 7/10 score, agreeing with the stock's leader position due to its high relative strength. It states the long-term price direction is still up, although the short-term direction has turned down, hinting at recent sideways movement or decline. The stock is priced in the higher section of its 52-week span, but is now checking key support levels after a large increase over the previous year.
Market Setting and Points to Think About
The last part of CAN SLIM, "M" for Market Trend, tells investors that even the best single stock can have difficulty in a poor overall market. At present, the S&P 500 has a down long-term direction and a neutral short-term direction. This mixed-to-careful setting points to the need for accurate timing and careful risk control, like using stop-loss orders, which are highlighted in O'Neil's method. Investors should balance the stock's strong individual traits against the existing market challenges.
Finding More CAN SLIM Prospects
Kinross Gold Corp offers a notable example of a stock fitting many strict CAN SLIM growth and leader filters. For investors wanting to see the complete list of companies that passed this particular filter, or to adjust the standards for their own study, you can view the pre-set filter setup here: O'Neill CANSLIM High Growth Screen.
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 from given data and should not be the only reason for an investment choice. Investors must do their own separate study and talk with a registered financial advisor before making any investment choices. Past results do not guarantee future outcomes.