The CANSLIM system, popularized by William O’Neil, is a growth investing methodology that combines fundamental and technical analysis. It screens for companies with accelerating earnings and sales, strong annual growth, healthy fundamentals, leadership in relative strength, and institutional sponsorship, while also considering market direction. By running a screener based on these criteria, we identified a candidate that checks many of these boxes.
Meeting the CANSLIM Criteria
Pan American Silver Corp (NYSE:PAAS) is a precious metals producer with operations in silver and gold across the Americas. Let’s examine how it lines up with each CANSLIM component.
C – Current Quarterly Earnings and Sales
The most recent quarter’s earnings per share (EPS) surged 159.5% year-over-year – well above the 20% minimum. Revenue growth came in at 49.3%, double the 25% threshold. Both figures are accelerating relative to previous quarters, which O’Neil emphasizes as a sign of strong momentum.
A – Annual Earnings Increases
Over the past three years, EPS has grown at a compound rate of 200.4% – far outstripping the 25–50% range typically sought. The company’s return on equity (ROE) stands at 17.2%, comfortably above the 10% benchmark, indicating it is generating solid profits on shareholders’ capital.
N – New Products, New Highs, Proper Base
While “newness” is harder to quantify, PAAS has expanded into new mining projects and holds a 44% stake in the high-grade Juanicipio silver mine. The stock is currently forming a consolidation pattern – a prerequisite for a proper chart base. The technical setup quality rating of 8 out of 10 suggests the price structure is constructive, even though the overall technical trend is currently negative.
S – Supply and Demand
The company’s debt-to-equity ratio is extremely low at 0.11 (well under the 2.0 limit), and daily average volume of about 4.7 million shares provides ample liquidity. A low debt burden and active trading are favorable for breakout moves.
L – Leader or Laggard
PAAS shows a relative strength rating of 77.32, meaning it has outperformed 77% of all stocks over the past year. This places it firmly in the “leader” camp, a key requirement for CANSLIM.
I – Institutional Sponsorship
Institutions hold 61.8% of shares – below the 85% upper bound. This level leaves room for further accumulation, which can fuel additional price gains as more funds discover the name.
M – Market Direction
The S&P 500 currently has a neutral long-term trend but a positive short-term trend. While the broader market is not in a strong bull phase, it also isn’t in a confirmed bear market. CANSLIM practitioners would wait for a clearer uptrend before committing capital, but the setup can be watched closely.
Fundamental Analysis Overview
The ChartMill fundamental report assigns PAAS a rating of 7 out of 10. Profitability is a standout: return on assets (12.5%), return on equity (17.2%), and profit margins (31.7%) all rank among the best in the Metals & Mining industry. Margins have been growing consistently. The company’s financial health is solid, with an Altman Z-score of 5.10 and a debt-to-FCF ratio of just 0.64. Valuation is attractive: a trailing P/E of 14.2 and a forward P/E of 8.4 are both well below industry averages. However, future earnings growth is expected to slow to around 7.4% annually, and revenue is projected to decline slightly over the coming years – a factor to weigh against the strong past performance. You can review the full fundamental breakdown in the FA report.
Technical Analysis Overview
The technical picture is more mixed. The overall technical rating is low at 1 out of 10, with both short- and long-term trends currently negative. The stock is trading in the middle of its 52-week range and has fallen about 21% over the past three months. That said, the setup quality is rated 8 out of 10, indicating a potential consolidation pattern. Support exists near $41.76–$42.02, and resistance lies at $45.30 and $58.96. Volume remains healthy, and the stock’s yearly performance still ranks in the top 23% of all stocks. For a detailed look at resistance levels and trend analysis, see the TA report.
Valuation and Risks
From a valuation perspective, PAAS screens as inexpensive. The PEG ratio (based on forward earnings) is low, and the price-to-free-cash-flow multiple is attractive relative to peers. Risks include the slowdown in projected earnings and revenue growth, as well as the
Read full article here »
View the Zacks #1 Rank List
Pan American Silver (PAAS) Shows Strong Growth Leadership in CANSLIM Screen
The CANSLIM system, popularized by William O’Neil, is a growth investing methodology that combines fundamental and technical analysis. It screens for companies with accelerating earnings and sales, strong annual growth, healthy fundamentals, leadership in relative strength, and institutional sponsorship, while also considering market direction. By running a screener based on these criteria, we identified a candidate that checks many of these boxes.
Meeting the CANSLIM Criteria
Pan American Silver Corp (NYSE:PAAS) is a precious metals producer with operations in silver and gold across the Americas. Let’s examine how it lines up with each CANSLIM component.
C – Current Quarterly Earnings and Sales
The most recent quarter’s earnings per share (EPS) surged 159.5% year-over-year – well above the 20% minimum. Revenue growth came in at 49.3%, double the 25% threshold. Both figures are accelerating relative to previous quarters, which O’Neil emphasizes as a sign of strong momentum.
A – Annual Earnings Increases
Over the past three years, EPS has grown at a compound rate of 200.4% – far outstripping the 25–50% range typically sought. The company’s return on equity (ROE) stands at 17.2%, comfortably above the 10% benchmark, indicating it is generating solid profits on shareholders’ capital.
N – New Products, New Highs, Proper Base
While “newness” is harder to quantify, PAAS has expanded into new mining projects and holds a 44% stake in the high-grade Juanicipio silver mine. The stock is currently forming a consolidation pattern – a prerequisite for a proper chart base. The technical setup quality rating of 8 out of 10 suggests the price structure is constructive, even though the overall technical trend is currently negative.
S – Supply and Demand
The company’s debt-to-equity ratio is extremely low at 0.11 (well under the 2.0 limit), and daily average volume of about 4.7 million shares provides ample liquidity. A low debt burden and active trading are favorable for breakout moves.
L – Leader or Laggard
PAAS shows a relative strength rating of 77.32, meaning it has outperformed 77% of all stocks over the past year. This places it firmly in the “leader” camp, a key requirement for CANSLIM.
I – Institutional Sponsorship
Institutions hold 61.8% of shares – below the 85% upper bound. This level leaves room for further accumulation, which can fuel additional price gains as more funds discover the name.
M – Market Direction
The S&P 500 currently has a neutral long-term trend but a positive short-term trend. While the broader market is not in a strong bull phase, it also isn’t in a confirmed bear market. CANSLIM practitioners would wait for a clearer uptrend before committing capital, but the setup can be watched closely.
Fundamental Analysis Overview
The ChartMill fundamental report assigns PAAS a rating of 7 out of 10. Profitability is a standout: return on assets (12.5%), return on equity (17.2%), and profit margins (31.7%) all rank among the best in the Metals & Mining industry. Margins have been growing consistently. The company’s financial health is solid, with an Altman Z-score of 5.10 and a debt-to-FCF ratio of just 0.64. Valuation is attractive: a trailing P/E of 14.2 and a forward P/E of 8.4 are both well below industry averages. However, future earnings growth is expected to slow to around 7.4% annually, and revenue is projected to decline slightly over the coming years – a factor to weigh against the strong past performance. You can review the full fundamental breakdown in the FA report.
Technical Analysis Overview
The technical picture is more mixed. The overall technical rating is low at 1 out of 10, with both short- and long-term trends currently negative. The stock is trading in the middle of its 52-week range and has fallen about 21% over the past three months. That said, the setup quality is rated 8 out of 10, indicating a potential consolidation pattern. Support exists near $41.76–$42.02, and resistance lies at $45.30 and $58.96. Volume remains healthy, and the stock’s yearly performance still ranks in the top 23% of all stocks. For a detailed look at resistance levels and trend analysis, see the TA report.
Valuation and Risks
From a valuation perspective, PAAS screens as inexpensive. The PEG ratio (based on forward earnings) is low, and the price-to-free-cash-flow multiple is attractive relative to peers. Risks include the slowdown in projected earnings and revenue growth, as well as the
Read full article here »