One New CANSLIM Long Position And One Stock I Am Adding To My Existing Position

September 17, 2007

new CANSLIM long position: BKR

BKR is bouncing off support of this possible flat base (or a two or three week tight base), on strong volume. This stock has done nothing but move higher since its IPO in 1984 and it appears it isn’t ready to stop yet. While the stock has made a lot of gains already the past year, this stock appears ready to get more. The massive accumulation from April to the beginning of September has led to the stock creating what could be a flat base. In this flat base, volume has come down, while at the same time BOP has moved to the max green area. The bounce today, off the bottom of support, with the stock closing near the high of the day and with BOP staying max green makes this a very strong chart pattern despite the large gains already. The fundamentals are strong, with EPS growing between 75% and 638% the past three quarters, sales growing between 1% and 25% the past six quarters, a ROE of 7%, a cash flow of $1.38, 12% debt, an EPS growth rate of 15%, a SMR rating of D, an EPS rating of 89, and YOY earnings estimates for 2007 and 2008 for gains of 196% and 11% respectively. Fund ownership has been rocky but has grown from 19 funds to 28 funds the past quarter, showing that institutions are regaining interest in this stock and its story. Cut your first loss with a close below the 47.52 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

adding to existing CANSLIM long position: SLP

SLP is breaking out of a cup with handle pattern, on very strong volume. This chart was extremely pretty during its last uptrend from last October to April, with all the max green BOP and huge accumulation. Since then it has setup in a near perfect cup with handle (always scary when it looks this good–if it too good to be true…) with low volume during the whole base building period except on the bottom of the base where volume picked up as the stock found support near the 200 day moving average. That is when BOP turned green again and since stayed near the zero line. When the right side of the base started to get built, volume picked up quite a lot, along with BOP moving green again. After a quiet handle, the stock is now breaking out on strong volume and with BOP reaching a higher green level. This is a very pretty chart but not perfect due to the low price of the stock and the inherent risk of a pullback to the 50 day moving average. The fundamentals are very strong but coming from a low level, with EPS growing between 80% and 200% the past six quarters, sales growing between 26% and 78% the past six quarters, a ROE of 13%, a cash flow of $0.14 a share, 0% debt, an EPS growth rate of 19%, an SMR rating of A, an EPS rating of 89, and YOY earnings estimates for 2007 and 2008 for gains of 188% and 39% respectively. Fund ownership has grown from 4 funds to 7, during the past four quarters, showing that institutions are gaining interest in this stocks story. Management owns 59% of this stock, also, so they have a clear vested interest in this stock moving higher. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

One New CANSLIM Long Position And One Stock I Am Adding To My Existing Position

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