Understanding CANSLIM
Generally, investors using CANSLIM want EPS growth of over 20%, but the higher the better. A: Annual earnings increases over the last five years. Again, annual EPS growth should ideally be in excess of 20% over the last three to five years.
Does the Canslim method work?
CANSLIM is a method about how to make money in stocks, but does it work? We looked at empirical results and conclude the following: Yes, the CANSLIM method works and has beaten the S&P 500 since 2003, according to backtests. But the outperformance comes at a cost in terms of higher volatility and larger drawdowns.
What does can slim stand for?
In order to qualify as a CANSLIM stock the company needs to have the following characteristics: • C=Current Earnings: Quarterly earnings per share are up 25% or more. A=Annual Earnings: Five year average compounded earnings growth rate is greater that 24%.
How do you screen a Canslim stock?
In investing, the 80-20 rule generally holds that 20% of the holdings in a portfolio are responsible for 80% of the portfolio's growth. On the flip side, 20% of a portfolio's holdings could be responsible for 80% of its losses.