CANSLIM is a method for screening stocks pioneered by William O’Neil, founder of Investors Business Daily.
* C: Current Earnings. Current earnings should be up to 25% per share. If earnings have been accelerating in recent quarters, this is a positive sign.
* A: Annual earnings, which should be up 25% or more in each of the last three years. Annual returns on equity should be 17% or more
* N: New product or service. This means that a company should have a new idea that fuels the earnings growth seen in the current and annual earnings. This product is what allows the stock to continue to grow and achieve new highs.
* S: Supply and demand. The trading volume of the stock, especially during price increases.
* L: Leader or laggard? Buy the leading leading stock in a leading industry, not the laggards.
* I: Institutional ownership of the stock by mutual funds, especially in recent quarters. A quantitative indicator here is Accumulation/Distribution, a measure of mutual fund activity in a particular stock.
* M: Market indexes, especially the Dow Jones, S&P 500, and NASDAQ. Invest during times of definite uptrends of these three indices, as 75% of stocks will tend to follow the general market pattern.
CANSLIM
Overview: CANSLIM
CANSLIM is a method for screening stocks pioneered by William O’Neil, founder of Investors Business Daily.
* C: Current Earnings. Current earnings should be up to 25% per share. If earnings have been accelerating in recent quarters, this is a positive sign.
* A: Annual earnings, which should be up 25% or more in each of the last three years. Annual returns on equity should be 17% or more
* N: New product or service. This means that a company should have a new idea that fuels the earnings growth seen in the current and annual earnings. This product is what allows the stock to continue to grow and achieve new highs.
* S: Supply and demand. The trading volume of the stock, especially during price increases.
* L: Leader or laggard? Buy the leading leading stock in a leading industry, not the laggards.
* I: Institutional ownership of the stock by mutual funds, especially in recent quarters. A quantitative indicator here is Accumulation/Distribution, a measure of mutual fund activity in a particular stock.
* M: Market indexes, especially the Dow Jones, S&P 500, and NASDAQ. Invest during times of definite uptrends of these three indices, as 75% of stocks will tend to follow the general market pattern.
Articles
The “M” in CANSLIM:
Resources
Investors Business Daily: CAN SLIM online course.