CANSLIM.net's Top 10 Stocks
   With all due apologies to David Letterman for copying his popular format, here is CANSLIM.net's Top 10 List of stocks that have been showing some very bullish action, particularly in the past week.  Sure, a breakout can be a pretty clear “buy signal”, but you still must employ smart trading tactics to pick a point where you are going to be comfortable knowing that the risk/reward potential suits you.  Have a very close look at the following stocks to determine whether or not they are the right ideas for you, and pick a point where you aren’t chasing them too far extended from a good base.

     What is the backdrop for this special report we've prepared?  Well, collectively, the Dow Industrials, Nasdaq Composite, and S&P 500 all managed to close above their 200-day moving averages, a point noted in the latest CANSLIM.net Morning Market Commentary. While the major indices closed out the past week with very strong gains, it was widely noted that the Dow Industrials’ rise of 8.4% was its best weekly gain since October 1982.  Need we remind anyone that in 1982 the market was just beginning a major bull market? 

     The sustainability of the latest rally will eventually be challenged.  It is only reasonable to expect pullbacks along the way, so the important thing to realize when an ideal stock blasts right by before you got on board, there will almost certainly be some backing and filling done by most of these first ideas blasting out of the gate.  So, as long as the broad market is able to maintain its broad based upward trend, you might find an opportunity to buy into the best high-ranked leaders on any normal dips in price.  

     There should also be many other winners coming along in the following days and weeks.  So, recognize the chart characteristics of the latest breakouts and be ready to have quick reflexes when the next stock you are watching crosses that important buy point.  And since there are never any guarantees in this business, watch the market closely, and if the market starts to fail miserably and you see your stock breaking down, always be willing to walk away with a small loss to minimize the damage and protect yourself from a more devastating loss that could really cause you serious financial harm.  

And the list below is in no particular order, by the way....    

Stratasys, Inc. (Nasdaq: SSYS $13.00) is engaged in the 3-D imaging business, which is referred to as rapid prototyping. It makes prototyping devices that allow engineers and designers to create models and prototypes from computer-aided design (CAD) workstations.  Its customers include GM, Intel, Boeing, Lego, Honda, Lockheed Martin, and Ford.  Analysts expect 2003 EPS to grow 48% to $0.83.  It has 4.5 million shares in the float, making it a small and potentially explosive growth prospect. The chart resembles a cup-with-handle, and it is impossible to miss volume when it is more than six times normal, as was the case on Friday as it blasted off.

Stericycle (Nasdaq: SRCL $39.42) has a fully integrated, national medical waste management network. Its services and operations are comprised of collection, transportation, treatment, disposal and recycling, while it also offers related training and education programs, consulting services and product sales. Unmistakably bullish volume has driven it up substantially in the past week, allowing it to break out of a 5-month base.  This action may be signaling the beginning of a major advance in price, while short-term we might expect a dip to be normal.  Support should be fairly solid in the $37.00 range, so on any weakness you can consider this idea for purchase and have a close stop-out point.

PCTEL, Inc. (Nasdaq: PCTI $8.82) is a provider of Internet access solutions and wireless mobility software.  Last week the company announced a new multi-year licensing agreement with Boingo Wireless, the largest aggregator of Wi-Fi hot spots for the wireless industry.  The action that followed was explosive, and the stock blasted out of a better than 4-month base on heavy volume.  Of course, low priced stocks are not always the most predictable, and looking back at this stock’s 2000 highs it is easy to see its history as a concern.  However, fundamentals seem to justify some of the recent strength as earnings growth has a direct correlation with share prices.

FindWhat.com (Nasdaq:FWHT $10.00) operates a bid-for-position search engine that distributes its listings to third-party websites, and also runs BeFirst.com RankPro, a search engine optimization service.  This is an Internet stock without the scary history that most others in the group will have to continue living with, and the company has the right kind of fundamental picture that underlines and helps to justify its recent price strength. We are not simply mentioning it because Bambi Francisco of CBS MarketWatch said it “ended the day with a price-to-earnings multiple of 16 times, which appears relatively reasonable compared to the other search companies.”  The internet group is included among those leading the rally, while EBAY, AMZN, and YHOO are the sector’s “Blue Chips”.

Brown Shoe Company, Inc. (NYSE:BWS $29.23) is a footwear retailer and wholesaler that operates retail shoe stores and is involved in the sourcing and marketing of footwear for women, men and children.  The Retail sector is helping lead the market, with a number of issues in the group looking like promising candidates to have continued run-ups.  Reebok (RBK) has 60 million shares outstanding, when speaking of others with confirming strength, meanwhile the 17 million shares outstanding for BWS may allow its stock to be more fleet footed.  It lifted off from a long flat base with a high volume breakout on Friday.  The company has solid fundamentals and could be a step in the right direction for a CANSLIM fan’s portfolio.

Advanced Neuromodulation (Nasdaq:ANSI $39.32) makes advanced implantable devices that deliver electrical current or drugs directly to targeted areas of the body to manage chronic pain.  Above average volume has accompanied its recent rise to near all-time highs.  It is in the Medical-Products group that features numerous strong leaders, providing confirming strength.  The past three quarterly reports have included strong earnings increases over the year earlier period ranging from 138%-160%.  Earnings growth like that can help to justify a major rise in share prices.  A small 12.2 million share supply of outstanding shares also might allow for its shares to climb quickly when under accumulation by institutional investors.

Endo Pharmaceuticals Hldg (Nasdaq:ENDP $11.03) is engaged in the research, development, sale and marketing of branded and generic prescription pharmaceuticals used primarily to treat and manage pain. Numerous generic drug makers are showing similar strength and bullish charts.   Although ENDP still faces important resistance at the $13 area where in 2002 it twice reversed and had to regroup, the strong sales revenue and earnings growth it is demonstrating make it entirely likely to revisit and exceed those historic highs while it now sits 15.5% under its historic best.  Percentage increases in earnings over the year earlier have been in the triple digits, as in the past four announcements it came through with $0.05 vs -$0.02, $0.22 vs $0.11, $0.25 vs $0.10, and $0.29 vs $0.11 per share in earnings.

Open Text Corporation (Nasdaq:OTEX $28.21) makes, sells, and supports collaboration and knowledge management software for use on intranets, extranets and the Internet.  Its principal product line is Livelink, a product for global enterprises.  Sales appear to be increasing modestly, and earnings increases in the past quarterly reports were up 30%, up 67%, and in the most recent December '02 quarter up 33%.  It is a high ranked leader with growing institutional interest, as at least 16 additional mutual funds have bought an interest in this company in the past 6 months. One of the things fans of CANSLIM like to see is growing interest from fund managers.

UTi Worldwide Inc. (Nasdaq:UTIW $29.57) develops proprietary information technology systems which enable its customers to use the Internet to access its Web-based suite of supply chain software applications called UTi eMpower.  It is ranked second best overall in the Transportation-Services group with Expeditors Intl Wash Inc. (EXPD) and C H Robinson Worldwide (CHRW) among others in the group providing confirming strength.  Sequentially increasing sales revenue and earnings increases over the past several quarterly comparisons show clear acceleration in the top and bottom line numbers.  Companies in the transportation sector are often included among the first stocks giving clues when the economy is improving, as shipments of goods increase.

Career Education Corp (Nasdaq:CECO $51.01) is a provider of private, for-profit postsecondary education, with at least 42 campuses throughout the United States, Canada, the United Kingdom and other countries.  One of the striking characteristics of this company’s extremely solid fundamental performance is that earnings increases over the year earlier period in the past eight quarterly comparisons have ranged from 45% to 117%.  Also, a number of other issues in the Commercial Services-Schools group are showing similarly bullish charts.  That provides confirmation that industry trends seem to be working in the company’s favor.  Another encouraging trait is the increasing interest from the institutional crowd the company is generating.