Investing in Proven Growth Using CAN SLIM Revised
by Wayne A. Thorp, CFA
The “original” CAN SLIM approach of William O’Neil is based on O’Neil’s analysis of 500 of the biggest stock market winners from 1953 to 1993. The CAN SLIM approach presented in O’Neil’s book, “How to Make Money in Stocks,” was based upon the characteristics that these winning stocks possessed prior to their big price run-ups.
However, O’Neil 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. In 2002, O’Neil released his new findings in the third edition of “How to Make Money in Stocks” and this article focuses on our stock screen that is based on this revised approach.
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CAN SLIM Overview
Both the original and revised CAN SLIM screens seek companies with proven records of quarterly and annual earnings and sales showing strong relative price strength and support from leading institutions.
O’Neil shies away from value-oriented stock selection methodologies, as he believes that stocks generally sell for what they are worth. Therefore, in O’Neil’s opinion, stocks with low price-earnings ratios are probably priced correctly by the market.
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