How to Use the CAN SLIM Approach to Screen for Growth Stocks
by John Bajkowski
Take an attention-grabbing book title, toss in an easy-to-remember acronym, and top it off with a daily business newspaper that supplies information required for preliminary analysis: Youve got the recipe for a popular investment strategy. The CAN SLIM approach is presented by William ONeil, publisher of Investors Business Daily, in his book titled How to Make Money in Stocks: A Winning System in Good Times or Bad.
The second edition of How to Make Money in Stocks presented a stock selection approach developed by studying 500 of the biggest stock market winners from 1953 to 1993. The CAN SLIM approach presented in the book was based upon the characteristics that these winning stocks possessed prior to their big price run-ups. Recently, ONeil extended his analysis of past market winners to 600 companies that performed strongly from 1953 to 2001 and revised a number of CAN SLIM criteria. The third edition of How to Make Money in Stocks was published last year and presents the revised CAN SLIM rules (see Table 1). This article presents the CAN SLIM approach with an eye toward the recent changes and its application using AAIIs stock screening system—Stock Investor Pro. Additionally, the March/April 2003 issue of Computerized Investing presents how to apply the CAN SLIM stock screen using Internet stock screening systems.
In this article
- CAN SLIM Overview
- C = Current Quarterly Earnings
- A = Annual Earnings Increase
- N = New Products, New Management, New Highs
- S = Supply and Demand
- L = Leader or Laggard
- I = Institutional Sponsorship
- M = Market Decision
- Screening Results
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