Canslim

We have all heard about William O'Neil's trading system. He named his selection strategy CANSLIM, an acronym of the seven required factors. He first described CANSLIM in his best-selling book: “How to Make Money in Stocks,” now in its third edition.

Basically, CANSLIM is a break out system requiring increased daily volume on the purchase date and large earnings growth combined. There are also other requirements not usually identified with momentum investing.

O’Neil’s publishes Investor’s Business Daily newspaper which is used to be essential for discovering stocks meeting the CANSLIM strategy. The newspaper is probably essential if you want to advance as a stock trader.

But you don’t necessarily have to subscribe to the newspaper to find CANSLIM stocks. Although not an exact match, you can come close using MSN’s Deluxe Screener. Harry Domash at MSN developed this screen to find stocks meeting the CANSLIM requirements O’Neil described in his book.

For those using other screens, The selection criteria are:

EPS Growth Qtr vs Qtr  >=18
EPS Growth Year vs Year >=25
Last Price >= 0.9*52 Week High
Last Price >= 0.8*5-Year High Price
Shares Outstanding <= 25,000,000
12 Month Relative Strength .= 80
% Institutional Ownership >= 5
% Institutional Ownership <= 35
12 Month EPS: Cont Ops >= 1
Latest Fiscal EPS >= 0.5
EPS Growth Qtr vs Qtr <= 500
ROE 5-Year Avg >= 5