CANSLIM Stock: HFF, Inc (HF)

I’ve known about the CANSLIM method for picking stocks since 2007/08. Back then, I used MSN Money’s stock screener to find suitable stocks, but that has since been discontinued. About a year ago, I created an Excel file that uses the RCH Stock Market Functions Excel add-in to pull data from public sources and calculate my own metrics to find stocks that meet the CANSLIM criteria.
I’m currently looking at HFF, Inc (HF) as it meets almost all of the CANSLIM criteria and is sporting a very nice cup & handle pattern.

CANSLIM Criteria Target Actual
YoY Net Income Growth Rate 20% 35%
YoY Sales Growth Rate 25% 26%
EPS Growing past 3 years? Yes Yes
EPS Estimate Higher than last year? Yes Yes
3yr EPS Growth Rate 25% 50%
Net Income Growth Rate (5-Year Average) OPTIONAL 25% 150%
Return on Equity (5-year average) 17% 30%
Within 10% of High Yes Yes
New Product, Management, etc? Yes Lots of closed deals in Dec, 2014
Insider Ownership 10% 13%
12-month relative strength percentile 80% 54%
6-month relative strength percentile 80% 34%
3-month relative strength percentile 80% 85%
Institutional Ownership 5%-35% 76%
Notes Financial/property management

The Cup & Handle is well formed with declining volume in the handle.

My strategy is to buy at $37.25 if volume is 25-50% higher than average on the breakout day. My stop will be @ $34.64 (7%) and my limit is $44.70 unless the stock reaches that target within a couple of weeks, in which case I will hold longer.

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