This is another CANSLIM stock that I’ve been monitoring since Dec, 2014. It just broke out of a “double-bottom” pattern, so I’ve gone long.
I’ve included the CANSLIM criteria below. Note that this stock meets the criteria on almost all counts.
|YoY Net Income Growth Rate||20%||22%|
|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%||33%|
|Return on Equity (5-year average)||17%||19%|
|Within 10% of High||Yes||Yes|
|New Product, Management, etc?||Yes||Several acquisitions (Aug/Sept), and again in Feb, 2015|
|12-month relative strength percentile||80%||61%|
Let’s take a look at the chart, which shows a breakout of a decent double-bottom.
Note that price broke above point “b” on Friday, accompanied by high volume (80% higher than average). This indicates informed demand.
Strategy: Long @ $89.71 (just above point “b”) with a target of 20-25% gain (~$108). Stop loss is at –8% loss, or $82.60.