Developed by William O'Neil of Investor's Business Daily, CANSLIM is a method of screening for stocks based on the following seven characteristics. It should be noted that typically, only 2% of the database will qualify as buy candidates using these screening applications. In addition, when the Market Edge "Market Posture" is bearish, there will not be any selections since the M part of the formula requires a favorable market environment.
In order to qualify as a CANSLIM stock the company must have the followingcharacteristics:
C = Current Earnings: Quarterly earnings per share are up 15% or more.
A = Annual Earnings: One year earnings growth rate is greater that 24%.
N = New Highs: The stock is within 15% of making a new 52-week high and isbreaking out of a period of consolidation.
S = Shares Outstanding: The number of shares outstanding is less than 50 millionshares and there has been a recent increase in trading volume.
L = Leading Stocks: The company is a market leader reflected by a RelativeStrength Value (RSV) of 80 or higher. A RSV of 80 means that the stock outperformed 80% of all other stocks in the database during the past year.
I = Institutional Ownership: Institutional sponsorship should be between 10% and40%.
M = Market Conditions: The Market Edge "Market Posture" should beBullish. During periods when the posture is bearish, there will not be any selections.
