Hecla Mining Co. (NYSE:HL) has emerged as a potential candidate for investors following the CAN SLIM methodology, a growth-focused approach popularized by William O’Neil in How to Make Money in Stocks. This system combines fundamental and technical analysis to identify high-growth market leaders, emphasizing criteria such as accelerating quarterly earnings and sales, strong annual growth, healthy institutional sponsorship, and relative strength. By screening for these traits, CAN SLIM seeks stocks with the momentum to outperform in favorable market conditions. With the S&P500’s long-term and short-term trends currently positive, we ran a CAN SLIM-based screen and found HL, a precious metals producer. Let’s break down why this stock aligns with the strategy.
CAN SLIM Criteria Breakdown
The CAN SLIM acronym—standing for Current earnings, Annual earnings, New products/management, Supply and demand, Leader or laggard, Institutional sponsorship, and Market direction—provides a roadmap for stock selection. Below, we examine how HL meets each key criterion based on its latest financial and technical data.
C = Current Big or Accelerating Quarterly Earnings and Sales
The strategy demands at least 20% quarter-over-quarter EPS growth and 25% revenue growth. HL’s EPS growth (Q2Q) is an impressive 525%, far exceeding the threshold, while sales growth (Q2Q) stands at 57.43%. These figures signal strong current momentum, a core requirement for CAN SLIM.
A = Annual Earnings Increases
The system looks for annual EPS growth of 25-50% over three years. HL delivers EPS growth of 122.07% over the past three years, comfortably surpassing the minimum. The company also has a Return on Equity (ROE) of 10.63%, above the 10% benchmark, confirming profitability.
N = Newer Companies, New Products, New Highs
While HL is not a new company—it’s been operating since 1891—it focuses on newer mining assets like the Keno Hill Silver Project in Yukon. The stock’s relative strength (95.09) indicates it outperforms 95% of all stocks, suggesting it’s near new highs relative to peers.
S = Supply and Demand
The strategy favors low debt and high volume at key points. HL’s Debt/Equity ratio is a conservative 0.10, well below the 2.0 limit. With a 50-day average volume of about 21.2 million shares, liquidity is strong, supporting demand signals.
L = Leader or Laggard
CAN SLIM requires a relative strength of at least 75. HL’s relative strength of 95.09 places it among the top 5% of leaders, outperforming 94% of stocks in the metals and mining industry. This leadership aligns with the system’s focus on market outperformers.
I = Institutional Sponsorship
The strategy seeks increasing institutional ownership but below 85% to avoid overcrowding. HL’s institutional ownership is 76.56%, which is within the threshold and suggests active but not excessive institutional interest.
M = Market Direction
With the S&P500 trending positively in both the long and short term, the general market supports a bullish environment for CAN SLIM entries. HL’s performance should be considered against this backdrop.
Valuation and Growth Metrics
Beyond the core CAN SLIM criteria, valuation matters for entry timing. HL’s Price/Earnings ratio of 24.37 is slightly above the S&P500 average of 26.91, but its Price/Forward Earnings ratio of 13.37 is below the index’s 21.49, indicating potential value relative to future earnings. The EPS growth rate is expected to increase by 31.98% annually over the next few years, with a low PEG ratio suggesting reasonable compensation for this growth.
The company’s profitability metrics are solid: an operating margin of 44.47% and a gross margin of 50.95% both outperform most industry peers. Its Return on Invested Capital (ROIC) of 13.32% is strong, though the three-year average ROIC is lower at 4.26%, reflecting recent improvements.
Technical Analysis Overview
A look at the technical analysis report reveals a mixed picture for HL. The overall technical rating is 4 out of 10, with a setup quality of 5 out of 10. Positives include strong past-year performance (169% gain) and high relative strength, but the short-term trend is neutral and the long-term trend remains negative. The stock is currently trading in the middle of its 52-week range, with key support around $15.52 and resistance near $17.80 and $18.53. The recent consolidation pattern offers a potential setup, but caution is warranted given the weaker trend signals.
Fundamental Analysis Highlights
The fundamental analysis report assigns an overall rating of 6 out of 10, supported by strong profitability and health scores. The Altman-Z score of 9.50 indicates low bankruptcy risk, and the Debt/Equity ratio of 0.10 underscores financial prudence. However, future EPS growth is projected at just 4.25% on average, which may moderate expectations versus the recent strong growth.
Explore More CAN SLIM Candidates
While HL meets many CAN SLIM criteria, the system encourages screening for a range of stocks. For investors looking to apply this strategy more broadly, you can access the CAN SLIM high-growth screener configuration to find additional stocks with similar growth patterns. This filter combines quarterly EPS growth above 20%, revenue growth above 25%, and relative strength above 75, among other parameters.
FINAL NOTE
The information in this article is for educational and informational purposes only and does not constitute investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.
Read full article here »
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Hecla Mining Co. (NYSE:HL) Shines in CAN SLIM Screen with 525% EPS Growth
Hecla Mining Co. (NYSE:HL) has emerged as a potential candidate for investors following the CAN SLIM methodology, a growth-focused approach popularized by William O’Neil in How to Make Money in Stocks. This system combines fundamental and technical analysis to identify high-growth market leaders, emphasizing criteria such as accelerating quarterly earnings and sales, strong annual growth, healthy institutional sponsorship, and relative strength. By screening for these traits, CAN SLIM seeks stocks with the momentum to outperform in favorable market conditions. With the S&P500’s long-term and short-term trends currently positive, we ran a CAN SLIM-based screen and found HL, a precious metals producer. Let’s break down why this stock aligns with the strategy.
CAN SLIM Criteria Breakdown
The CAN SLIM acronym—standing for Current earnings, Annual earnings, New products/management, Supply and demand, Leader or laggard, Institutional sponsorship, and Market direction—provides a roadmap for stock selection. Below, we examine how HL meets each key criterion based on its latest financial and technical data.
C = Current Big or Accelerating Quarterly Earnings and Sales The strategy demands at least 20% quarter-over-quarter EPS growth and 25% revenue growth. HL’s EPS growth (Q2Q) is an impressive 525%, far exceeding the threshold, while sales growth (Q2Q) stands at 57.43%. These figures signal strong current momentum, a core requirement for CAN SLIM.
A = Annual Earnings Increases The system looks for annual EPS growth of 25-50% over three years. HL delivers EPS growth of 122.07% over the past three years, comfortably surpassing the minimum. The company also has a Return on Equity (ROE) of 10.63%, above the 10% benchmark, confirming profitability.
N = Newer Companies, New Products, New Highs While HL is not a new company—it’s been operating since 1891—it focuses on newer mining assets like the Keno Hill Silver Project in Yukon. The stock’s relative strength (95.09) indicates it outperforms 95% of all stocks, suggesting it’s near new highs relative to peers.
S = Supply and Demand The strategy favors low debt and high volume at key points. HL’s Debt/Equity ratio is a conservative 0.10, well below the 2.0 limit. With a 50-day average volume of about 21.2 million shares, liquidity is strong, supporting demand signals.
L = Leader or Laggard CAN SLIM requires a relative strength of at least 75. HL’s relative strength of 95.09 places it among the top 5% of leaders, outperforming 94% of stocks in the metals and mining industry. This leadership aligns with the system’s focus on market outperformers.
I = Institutional Sponsorship The strategy seeks increasing institutional ownership but below 85% to avoid overcrowding. HL’s institutional ownership is 76.56%, which is within the threshold and suggests active but not excessive institutional interest.
M = Market Direction With the S&P500 trending positively in both the long and short term, the general market supports a bullish environment for CAN SLIM entries. HL’s performance should be considered against this backdrop.
Valuation and Growth Metrics
Beyond the core CAN SLIM criteria, valuation matters for entry timing. HL’s Price/Earnings ratio of 24.37 is slightly above the S&P500 average of 26.91, but its Price/Forward Earnings ratio of 13.37 is below the index’s 21.49, indicating potential value relative to future earnings. The EPS growth rate is expected to increase by 31.98% annually over the next few years, with a low PEG ratio suggesting reasonable compensation for this growth.
The company’s profitability metrics are solid: an operating margin of 44.47% and a gross margin of 50.95% both outperform most industry peers. Its Return on Invested Capital (ROIC) of 13.32% is strong, though the three-year average ROIC is lower at 4.26%, reflecting recent improvements.
Technical Analysis Overview
A look at the technical analysis report reveals a mixed picture for HL. The overall technical rating is 4 out of 10, with a setup quality of 5 out of 10. Positives include strong past-year performance (169% gain) and high relative strength, but the short-term trend is neutral and the long-term trend remains negative. The stock is currently trading in the middle of its 52-week range, with key support around $15.52 and resistance near $17.80 and $18.53. The recent consolidation pattern offers a potential setup, but caution is warranted given the weaker trend signals.
Fundamental Analysis Highlights
The fundamental analysis report assigns an overall rating of 6 out of 10, supported by strong profitability and health scores. The Altman-Z score of 9.50 indicates low bankruptcy risk, and the Debt/Equity ratio of 0.10 underscores financial prudence. However, future EPS growth is projected at just 4.25% on average, which may moderate expectations versus the recent strong growth.
Explore More CAN SLIM Candidates
While HL meets many CAN SLIM criteria, the system encourages screening for a range of stocks. For investors looking to apply this strategy more broadly, you can access the CAN SLIM high-growth screener configuration to find additional stocks with similar growth patterns. This filter combines quarterly EPS growth above 20%, revenue growth above 25%, and relative strength above 75, among other parameters.
FINAL NOTE
The information in this article is for educational and informational purposes only and does not constitute investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.
Read full article here »