CANSLIM strategy!

William J. O'Neil, the global investment guru invented a strategy 'CANSLIM'. This is an acronym to identify the star stocks. When i came across this concept in Brand Quest quiz, I wasn't surprised. Management field is always flushed with acronyms and acronyms :-P . But the idea looks very simple. This is to analyse Penny stocks

[+] C -  current earnings growth,
Screening Parameter: EPS Growth Qtr vs. Qtr >= 18%

[+] A - Annual growth
Screening Parameter: EPS Growth Year vs. Year >= 25%
Screening Parameter: 12-Month EPS: Cont. Ops. >= 1.00
Screening Parameter: Latest Fiscal EPS >= $0.50
Screening Parameter: ROE 5-year average >= 5%

[+] N - New high,
Screening Parameter: Last Price >= 0.9*52-Week High
Screening Parameter: Last Price >= 0.8*5-Year High

[+]  S - Supply and demand of stocks
Screening Parameter: Shares Outstanding <= 25 million

[+]  L - Leader in industry
Screening Parameter: 12-Month Relative Strength >= 80

[+] I - Institutional ownerships
Screening Parameter: % Institutional Ownership >= 5%
Screening Parameter: % Institutional Ownership <= 35%

[+] M - Market direction
Dont play in a weak market (Best of the world advice... :-) )

Here in India, few people give investment advice based on CANSLIM.

• CupWatch - offering CANSLIM and cup-with-handle stock market research, charts, and economic indicators used as guides and advice for investors with business daily updates.
• Amateur Investors - offers stock market information, quotes, 401k retirement plans, and penny stock lists using CANSLIM strategies.

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