Stock Picking Strategy – CANSLIM

System for Selecting Stocks


C – current Quarterly earnings of a firm – last Quarterly earnings have > 20% growth

A – annual earnings growth – annual EPS growth of 25- 50%
N – new product, service, management or new high in price level
S – supply and demand – smaller firms with smaller # shares < 25 mil
    – less #, more movement.
      Also, look out for re- purchasing which signals mgmt confidence
L – leader or laggard – relative px strength ~ 70% – ΔP stock/ ΔIndex over the same period of time
I – institutional sponsorship – ideally between 3 and 10 sponsors – over-owned, be cautious
M – market direction – uptrend/ under pressure/ correction – invest in time of definite uptrend – see Indices