Vertiv Holdings Co-A (NYSE:VRT) Passes Key CAN SLIM Filters for Growth Investors

Investors looking to find high-growth market leaders have long used the CAN SLIM method, a structured system made popular by William O'Neil. This plan joins careful fundamental study with important technical signs to find stocks with solid earnings momentum, better relative strength, and institutional support, all during a good market climate. The aim is to locate companies not only with solid past results, but with the traits that indicate they are set for major future price gains.

A recent filter using main CAN SLIM ideas has found Vertiv Holdings Co-A (NYSE:VRT) as a stock that deserves more study. The company, a designer and maker of important digital infrastructure for data centers and communication networks, seems to display a number of the numerical features the system looks for.

Looking at the CAN SLIM Rules

The CAN SLIM name describes a particular group of filters. Here is how Vertiv measures up against several of the system's main fundamental parts:

• C - Current Quarterly Earnings & Sales: CAN SLIM requires large, and ideally speeding up, growth in the latest quarter. Vertiv states a quarterly earnings per share (EPS) growth of 63.2% and sales growth of 29.0% versus the same quarter last year. These numbers greatly pass the common filter limits of 20-25%, showing strong recent business momentum.
• A - Annual Earnings Increases: The system searches for an established history of growth. Vertiv’s EPS has increased at a typical yearly rate of 55.4% over the last three years, well beyond the usual lowest need of 25%. This shows that the company’s power is not a single-quarter event but part of a continued pattern.
• L - Leader or Laggard: A central idea of CAN SLIM is to put money in market leaders, not laggards. This is measured using relative strength (RS), which checks a stock's price action against the wider market. Vertiv has a relative strength of 83.4, meaning it has done better than about 83% of all stocks over the past year. This puts it solidly in the leadership group the plan aims for.
• I - Institutional Sponsorship: The plan prefers stocks that are being found and bought by institutional investors, but not so much that future buying is restricted. Vertiv’s institutional ownership is at 80.2%, which is under a common filter top limit of 85%. This indicates there is still space for more institutional purchasing, which can give upward price support.

Other fundamental health numbers match the plan's attention to quality. The company displays a solid Return on Equity (ROE) of 29.5%, showing good use of shareholder money, and keeps a workable Debt/Equity ratio of 0.83.

Fundamental and Technical Overview

A check of Vertiv’s wider financial and technical view gives needed setting. The company’s fundamental analysis report gives it a score of 7 out of 10, noting "excellent profitability" and "great financial health." Analysts see strong growth in both income and earnings, with forecasts for more growth in the next few years. While its price based on normal P/E numbers seems high, this is partly explained by its high growth rate and profitability.

The technical analysis report shows a more varied short-term view, with a score of 4 out of 10. The long-term direction stays positive, showing the stock's large increases over the past year. However, the short-term direction has become negative, with the stock moving down from recent peaks and trading under important average lines. It is now settling within a broad band, and the report proposes waiting for a clearer pattern before thinking about an entry. This highlights the "M" (Market Direction) part of CAN SLIM; while the long-term market direction is positive, investors must be careful about their entry timing.

A Stock for More Study

Vertiv makes a strong case for investors using the CAN SLIM structure. It clearly passes several of the system's most important fundamental filters: large quarterly and yearly earnings growth, high-level relative strength, and suitable institutional sponsorship. These points indicate the company is a frontrunner in its area, gaining from the long-term trends of digital infrastructure growth.

However, the present technical state shows the stock is in a settling stage after a major rise. For CAN SLIM investors, this could be a time to look for the next possible "correctly shaped base" and later upward move, preferably with high trading activity, before a position is started. It acts as a clear sample of how the plan uses fundamentals to make a watchlist and technicals to direct the entry choice.

For investors wanting to find other companies that match this growth-focused model, you can see and adjust the full CAN SLIM filter here.

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Disclaimer: This article is for information and learning only and is not investment advice, a suggestion, or an offer or request to buy or sell any securities. The study shown is based on given data and should not be the only ground for any investment choice. Investors should do their own complete research and talk with a qualified financial advisor before making any investment decisions. Past results are not a guide for future outcomes.