CAN SLIM Method: Stock Picking & 4 Solid Long-Term Companies

The CAN SLIM Method

Here are the basics of William O'Neil's CAN SLIM method . If you really want to cut to the chase, skip this and go straight to the CAN SLIM picks below:

C: Current earnings - Was the most recent quarter one where profits grew, ideally by 20% or more?

A: Annual earnings - Are earnings for the last twelve months at least 25% better than the prior twelve?

N: New - Is there new management, a new product or a new technology supporting growth?

S: Supply and demand - Are there persistently more buyers than sellers of the stock?

L: Leadership - Is this stock outperforming its peers, and at least in the top 20%?

I: Institutional sponsors - Have institutions like fund companies and pensions put a stamp of approval on the stock by owning it? A good stock needs at least three major institutional owners.
M: Market - Since most stocks move in tandem with the market, is the broad market at least modestly on the rise?

Current CAN SLIM Picks

Like I said, if you're a stickler on CAN SLIM's requirements, you're not going to find any stocks worth owning right now. If you're OK with just using the spirit of the criteria though (primarily the leadership and income growth requirements), and adjust for the current environment, you can indeed find some nice picks.


A.H. Belo Corp. (NYSE:AHC): This newspaper/television company hasn't been profitable on a trailing 12-month basis, a swing to a profit is anticipated for 2011.

Miller Industries (NYSE:MLR): Last quarter's revenue growth topped triple-digits despite a luke-warm rebound in auto sales (Miller makes car-haulers), and after four solid earnings beats, there's no reason not to expect more mega-growth.

Standex International Corp. (NYSE:SXI): This industrial machinery maker rebounded nicely following the recession. Oh, things weren't easy for Standex - the company lost 18 cents per share in fiscal 2009. That was book-ended, however, by income of $1.55 per share in 2008 and a profit of $2.25 per share in fiscal 2010. 2011 is looking even better.

Thermadyne Holdings (Nasdaq:THMD): Slice it however you want to - this welding-product maker more than quadrupled per-share earnings (year over year) in Q2, or is on pace for record-breaking earnings year in 2010.

Stocks coming off down week:

NEW YORK (AP) — It was a down week for stocks. Wall Street is hoping for better this week as earnings reports pick up.

In Friday trading, the Dow rose 57 points to close at 12,342. The S&P 500 index was up 5 points to 1,320. The NASDAQ composite added 4 points to 2,765.

For the week, the key averages were down between 0.3 and 0.6 percent.

WORLD MARKETS

Asia markets higher on US economic news

BANGKOK (AP) — Asian stocks were mostly higher Monday, shrugging off yet another anti-inflation move by China after encouraging news about the U.S. economy.

Japan's Nikkei 225 index eked out a marginal gain of less than 0.1 percent after opening lower. Hong Kong's Hang Seng rose 0.2 percent, while South Korea's Kospi slid 0.5 percent. Australia's S&P/ASX 200 added 0.3 percent.

Benchmarks in Singapore, Thailand, the Philippines and New Zealand were also higher. Mainland China's Shanghai Composite Index rose 0.3 percent. Taiwan's TAIEX was down slightly.

OIL PRICES

Oil near $109 as US gasoline prices jump

SINGAPORE (AP) — Oil prices fell to near $109 a barrel Monday in Asia as gasoline jumped to average $4 a gallon in six U.S. states and the District of Columbia, raising fears higher fuel costs will undermine crude demand.

Benchmark crude for May delivery was down 58 cents at $109.08 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.55 to settle at $109.66 on Friday.

In London, Brent crude for June delivery was down 33 cents to $123.12 a barrel on the ICE Futures exchange.

ECONOMY-WEEK AHEAD

Reports on housing among those due

WASHINGTON (AP) — The week is fairly light for economic reports. A reading is due today from the National Association of Home Builders on builder sentiment. Tomorrow, the government weighs in with housing starts for March. Also due this week, existing home sales, new unemployment claims and the index of leading economic indicators.

NABE SURVEY

Poll: US economy improving despite global events

WASHINGTON (AP) — Economists say the U.S. economy is gaining strength despite political unrest in North Africa and the Middle East and last month's devastating earthquake and tsunami in Japan.

A survey from the National Association for Business Economics finds that economists are hopeful that the broader economy is substantially improving, with rising employment reported for the fifth quarter in a row.

The outlook for employment rose slightly, reaching a 12-year high. No firms reported significant layoffs, with the only reductions coming from already planned cuts.

Sales increased for the third consecutive quarter, profit margins continued to improve and the number of economists whose firms increased spending over the previous quarter held steady. Nearly all of the 72 economists surveyed, about 94 percent, now expect the economy to grow at least 2 percent in 2011.

GAS PRICES

6 states and nation's capital now at $4 gas

WASHINGTON (AP) — Six states and Washington, D.C., now have gasoline prices averaging more than $4 per gallon.

Triple-A says New York State joined the list yesterday, which also includes Alaska, California, Connecticut, Hawaii and Illinois.

The next states could be Michigan, which has gas for $3.95 per gallon on average, and Indiana, where the average price is $3.94. Nevada, Washington and Wisconsin are close behind.

Hawaii has the highest price in the U.S. at $4.48 per gallon. Wyoming has the lowest, at $3.54.

The national average for gas has increased for 26 straight days, and is now at $3.83 per gallon.

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