Vertiv Holdings Co-A (NYSE:VRT) Fits the CAN SLIM Strategy with Strong Growth and Momentum

The CAN SLIM investing strategy, created by William O’Neil, merges fundamental and technical analysis to spot high-growth stocks with solid momentum. The approach targets firms showing faster earnings and sales growth, leading positions in their sectors, and backing from institutional investors, all while considering the overall market trend. By selecting stocks that fit these conditions, investors seek to benefit from substantial gains during favorable market periods.

Vertiv Holdings Co-A (NYSE:VRT) stands out as a strong option for CAN SLIM investors due to its impressive financial results and technical indicators. Here, we explore how VRT matches the strategy’s main elements.

C – Current Big or Accelerating Quarterly Earnings and Sales

A key part of the CAN SLIM strategy is finding firms with notable quarterly earnings and revenue growth. Vertiv’s latest quarter reports a 41.8% year-over-year EPS increase and 35.1% sales growth, well above O’Neil’s recommended minimum of 18-20%. This growth indicates high demand for the company’s digital infrastructure solutions, such as power and cooling systems for data centers.

A – Annual Earnings Growth

Consistent growth matters, and Vertiv achieves this with a three-year EPS compound annual growth rate (CAGR) of 55.4%, significantly higher than the 25% target. The firm’s Return on Equity (ROE) of 24.98% places it in the top 5% of its industry, showing strong profitability and effective use of capital.

N – New Products, Management, or Highs

Vertiv operates in the fast-growing data center and cloud infrastructure space, gaining from the rise of AI, cloud computing, and IoT. The stock has also reached new highs, trading close to its 52-week peak, a good sign for momentum-focused investors.

S – Supply and Demand

Vertiv’s debt-to-equity ratio of 1.09 is somewhat high, but its solid free cash flow (with a debt-to-FCF ratio of 2.25) suggests manageable debt. Trading volume has increased, pointing to growing interest from institutional buyers.

L – Market Leadership

With a relative strength (CRS) of 95.58, Vertiv beats nearly 96% of all stocks, a sign of strong market leadership. It also ranks in the top 12% of its Electrical Equipment industry peers, confirming its competitive edge.

I – Institutional Sponsorship

Institutional ownership is 80.3%, slightly below the 85% level CAN SLIM prefers, indicating potential for more institutional buying. Increased institutional interest could drive the stock higher.

M – Market Direction

The broader market remains positive, with the S&P 500 in an upward trend. CAN SLIM advises investing in strong stocks during bullish markets, and Vertiv’s momentum fits this approach.

Technical and Fundamental Summary

Vertiv’s technical analysis shows a stock in a clear uptrend, with both short- and long-term trends favorable. The fundamental analysis highlights outstanding profitability, growth, and financial stability, making it a top pick for growth-focused investors.

Next Steps for Investors

For those looking to find more stocks meeting CAN SLIM criteria, our pre-configured screener offers other high-growth opportunities.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making any decisions.