Find the Best CANSLIM Stocks Using a CANSLIM Stock Screener

Researched & Backtested Our In-Depth CANSLIM Strategy Shows You Exactly How To Implement CANSLIM + Screening Criteria That Should Beat the Market

Finding the best CANSLIM stocks requires a stock screener that has exactly the right selectable criteria and a large historical financial database so you can backtest the results.

CANSLIM is touted to be a highly profitable stock market strategy. We will discuss what CANSLIM is, how it works, and how to implement it in a stock screener that might beat the market. I also share the CANSLIM stocks selected by our 2021 and 2022 CANSLIM stock screening.

Plus, I introduce an additional strategy that helps you select the CANSLIM stocks for your portfolio using Buffett’s Margin of Safety.

CANSLIM - Stocks, Screening, Criteria & Strategy
CANSLIM – Stocks, Screening, Criteria & Strategy

The CANSLIM Strategy

CANSLIM is a stock investing growth strategy designed by William J. O’Neil to produce market-beating profit performance. The CAN SLIM strategy means investing in companies with high earnings growth, new products, good institutional sponsorship, and buying only in bull markets.

Current Earnings, Annual Earnings, New Products, Supply, Leaders, Institutional Sponsorship & Market Direction, are vital criteria.

CAN SLIM has the following stock selection criteria:

  • C – Current Earnings
  • A – Annual Earnings
  • N – New Products or Management
  • S – Supply and Demand
  • L – Leaders
  • – Institutional Ownership
  • M – Market Direction

Pioneered by William J. O’Neil, the CANSLIM method is the basis for his classic investing book, “How to Make Money in Stocks.”

Many people believe that the CANSLIM methodology is a Value Investing strategy, but this is incorrect. The system criteria do not target finding undervalued stocks but instead find companies with fast-growing earnings in growing markets with a competitive advantage. So CANSLIM is more like a stock market growth strategy.

Find out more about the CANSLIM strategy’s past performance with our article: What is CANSLIM? Does CAN SLIM Outperform the Market?

The CANSLIM Method of Investing

C – Current Earnings

Has the company made a strong recent earnings announcement, which is considerably more than the earnings one year previously?

From his research, O’Neill discovered that most companies that experienced strong stock price growth had quarterly earnings growth above 70% before the price growth started.

However, that might be the case for a small handful of hugely successful companies. Still, to build a portfolio of stocks, or at least have a choice of more companies, he recommends a most recent quarterly (MRQ) earnings per share (EPS) increase of at least 18-20%. He also suggests an accompanying sales growth of at least 25%.

The sales growth check is important because, without consistent sales growth, it is impossible to maintain earnings growth.

Has the company made a strong recent earnings announcement, considerably more than the earnings one year previously?

A – Annual Earnings.

Does the company show good earnings growth for previous years? O’Neill suggests an annual growth rate in earnings of at least 25%. He also suggests that a return on equity (ROE) of over 17% should also be checked for, as it implies the company is investing its capital efficiently.

Most stock screeners will allow you to filter on 1,3 & 5-year annual earnings growth. Select a 5-year annual earnings growth rate. This will help you filter out those companies who are simply experiencing short-term growth or manipulating accounts to show higher earnings for a particular quarter. You can play with the timescale you use, but this seems like a reasonable criterion.

N – New Products, Management, or Price Highs.

Has the company innovated its product base or injected new management to seek higher performance? Here we essentially move to a business question.

If a company has a history of innovation or developing products superior to the competition in price, quality, or both, this is an excellent signal for future stock price growth.

Additionally, according to O’Neill, the management or board changes were also a positive indicator. Injecting new blood into an organization’s leadership structure is a way to drive growth; New People = New Ideas.

Here I tend to disagree; continually injecting or hiring externally to try to find that magic growth formula very rarely works out positively.

Look at the history of Hewlett Packard (Ticker: HPQ); since the founders left, the company has constantly been injecting new management, merging, and spinning off, to the dismay of its shareholders and employees.

Finally, the suggestion is that new stock price highs might encourage further demand for the stock and push prices even higher.

– Supply and Demand.

Does the stock have an increasing demand in the marketplace? Is trading volume increasing with the price?

Here we get to a core principle; it is the only reason why stock prices go up or down. If the sellers (supply) outnumber the buyers (demand), stock prices decrease. If demand outstrips supply, prices go up.

A stock price may go up or down on any single day, and it is largely irrelevant. However, if you see over weeks and months volume growth and stock price going up, you know demand is higher than supply.

O’Neill recommends that the daily trading volume be higher than the average volume for the stock in the previous three months.

– Leaders

Is the company a leader in its marketplace? This is another key business question about competitive advantage.

A company that is a leader in its industry must have some key competitive advantages, either in the product, service quality, or pricing. However, finding these companies by sifting through every firm’s product listing and doing a competitive market analysis is difficult. So, O’Neill kindly suggests looking for companies with stock price strength higher than their competitors, higher even than 80% of the stock market.

Essentially any company near, at, or breaking through their stock price 52 week high is a candidate. Add to this any company outperforming the major market indices in terms of price growth. So, to beat the market, you need to select companies that are already beating the market. Seem reasonable?

I – Institutional Ownership.

Does the stock have a solid level of institutional ownership? More than 70% of all stocks are owned by institutions, mostly on behalf of their investors. If you have a pension or own ETFs, you will not own the stocks; you own part of the company that holds those stocks for you.

The point here is that you would want to see at least 30% institutional ownership to know that the company is at least on the radar of institutional buyers.

As investment companies have the most buying power, they can make the biggest impact on stock prices; if the company is not interesting to the investment firms, the chances of the stock price moving significantly higher or negligible.

Finally, if institutional ownership is over 90%, how much room is there for the stock price to move higher? Not much.

M – Market Direction.

Understanding the overall market direction is important to time your purchase of the stock effectively.

The market moves in three directions, uptrend, downtrend, or consolidation (sideways). If you are buying stocks during a multi-year bear market, then the chances of you making any money are small. During periods of market fear, most company stock prices drop.

In fact, 3 out of 4 stocks move in the same direction as the market, according to O’Neill.

The actual reality is that it takes 3 out of 4 stocks to move upwards to move the market upwards, as the market is only a reflection of all the stock prices. The key takeaway here is that if you buy stocks in a Bull market, you have a much greater chance of making a profit, and that is a fact.

CANSLIM Strategy Explained

The CANSLIM strategy is essentially a flexible investing style that relies on the positive stock price momentum generated by fast-growing, profitable companies with solid quarterly and annual earnings growth. The companies must also have innovative leading products and services in a growing bull market.

Now let’s take a step back to understand the overall CANSLIM strategy.

Flexibility: With CANSLIM, there is no defined holding period for a stock. You may hold the stock for two days or two years. It could be seen as a swing trading strategy or a medium-term buy-and-hold strategy. One thing it is not is a value investing strategy.

The entry point into stock is suggested to be when the stock price breaks into a new 52 week high. The strategy also suggests that you should cut your losses and sell if the stock falls 7 to 8%%. For any given stock, this could happen within a week or over a period of years, therefore, a flexible timeframe.

Momentum: CANSLIM is a momentum strategy, as the rules are to buy when the stock is at a new 52 week high, when the stock is experiencing increased trading volume, and when the overall market is in an uptrend. This is the definition of momentum trading and market timing.

Profitable Growth: The CANSLIM strategy also requires, at its core, a company to be growing earnings strongly. Current quarterly earnings and annual earnings must be increasing aggressively, along with sales. So, you are looking for profitable fast-growing companies.

Great Products: Of course, the L in CANSLIM refers to companies leading their industry in terms of product and services, innovation, or at least stock price growth. This makes sense. Would you want to buy shares in a company falling behind its competitors?

Growing Markets: Finally, the M in CANSLIM refers to growing markets. The market that the company operates in needs to be growing, for example:

  • Google’s explosive growth was fueled by the widespread rapid adoption of the internet.
  • Over the last eight years, Nvidia’s growth has partly been fueled by the cryptocurrency craze; their graphics card chips are used in Crypto mining operations.

The CANSLIM strategy is to:

Buy stocks in profitable companies, with great products, in growing markets at the right time.

Stock Market Investing Training - Liberated Stock Trader Pro

Liberated Stock Trader Pro Investing Course
★ 16 Hours of Video Lessons + eBook ★
★ Complete Fundamental Stock Analysis Lessons ★
★ 2 Powerful Value Investing Strategies ★
★ 4 Dividend/Income Investing Strategies ★
★ Professional Grade Stock Chart Technical Analysis Lessons ★

Go Pro Now

CANSLIM Stock Screener

A CAN SLIM stock screener needs to scan for Current Earnings and Annual Earnings with a 5-year history. Next, the CANSLIM screener needs to filter on 52-week stock price highs, the Number of Shares Available, and the share price Relative Strength vs. Competitors. Also, the Institutional Ownership criteria are critical.

To implement a CANSLIM strategy, you will need to use a stock screener to automatically scan the entire stock market to find stocks that meet the right criteria.

The Best CANSLIM Stock Screener

The best CANSLIM stock screener on the market today is Stock Rover for USA and Canada exchanges and TradingView for international exchanges. If you intend to implement this system on US and Canadian stocks, we strongly recommend Stock Rover; it won our Top 10 Best Stock Screener Review and is also great value for money.

This article will show you how to implement CANSLIM for yourself using Stock Rover.

The CANSLIM Screener Results

The CANSLIM strategy results using the Stock Rover screener are impressive, beating the S&P 500 on all timescales from 5 days to 10 years; look at the screenshot below.

The CANSLIM Stock Screener Beats the S&P 500
The CANSLIM Stock Rover Stock Screener Beats the S&P 500

You can see that the CANSLIM scan in Stock Rover has beaten the S&P 500 solidly over the past years.

Return vs. S&P 500 Percent Beat
5 Day 2.7%
1 Month 9.4%
3 Month 13.6%
6 Month 13.9%
1 Year 23.4%
10 Years 100.6%

I would not rely on the 10-year figure as you will need to constantly run the scan at least monthly and add stocks to the portfolio or remove those that no longer qualify.

-

5 Steps to Implement CANSLIM with a Stock Screener

Here are the 5 Steps to implement the Stock Rover CANSLIM stock screening strategy.

1 – Get The Best CANSLIM Stock Screener

Stock Rover Stock ScreenerYou will need a Stock Rover Premium Plus Membership, which gives you access to all the criteria and the database with a unique 10-year history. It will also allow you to implement all our Warren Buffett screeners and our full list of stock screening strategies, and our Dividend growth and dividend yield strategies.

2 – Browse Screener Library

See the image to the right.

Launch Stock Rover and select:

  1. Screeners (Down Arrow)
  2. Browse Screener Library
Importing the CANSLIM Screener in Stock Rover
Importing the CANSLIM Screener in Stock Rover

This takes you to the following screen.

3 – Import the CANSLIM Screener

Stock Rover has a built-in screen for CANSLIM called “CAN SLIM – Less Restrictive,” which has an outstanding performance record.

This is the screener we will be using.

  1. In the Screeners search box, type “CAN SLIM.”
  2. Select the two CAN SLIM Screeners
  3. Click Button – Import (2 Items Selected)
Searching for CANSLIM
Searching for CANSLIM

4 – View the Portfolio Performance

Now that you have imported the screener, here is how to set up the excellent comparison view vs. the S&P 500

  1. Select Screeners
  2. Select the CAN SLIM – Less Restrictive Screener
  3. In the Chart Below, Select “Compare To”
  4. Select Benchmarks
  5. Select S&P 500 or NASDAQ
  6. Select Return Vs. S&P 500 Column Views
How To Setup Your CANSLIM Screener vs S&P 500 View
How To Setup Your CANSLIM Screener vs. S&P 500 View

5 – Selecting Your CANSLIM Stocks

The scan produces a list of 32 stocks from the entire stock exchange listing of over 12,000 companies. Even though this list is small, 32 may still be too many to hold at any one time. So, you will need to select the right companies to invest in carefully.

I suggest that you combine the CANSLIM strategy with Warren Buffett’s margin of safety concept in value investing. The margin of safety is a way of measuring how undervalued stock is compared to its intrinsic value. The more undervalued a stock is, the safer the investment.

So, you could simply narrow down your stock selection using, for example, the top 10 stocks with the highest margin of safety. See the image below.

CANSLIM Strategy Combined With Buffett's Margin of Safety for Stock Selection
CANSLIM Strategy Combined With Buffett’s Margin of Safety for Stock Selection
-

CANSLIM Screener Criteria

The CANSLIM screener criteria we are using are as follows:

  • Current Earnings – EPS (MRQ) >= 1.18* EPS [Q4]
  • Annual Earning – EPS 5-Year Average (%) > 24.9
  • New Price High – Price vs. 52-week high (%) >84
  • Supply – Shares Available (Millions) > 9
  • Leader – Relative Strength Index > 69
  • Institutional Ownership % > 35
  • Market Direction – Is the Market Trend Up?

As you can see, all the factors in CANSLIM are covered, except for the overall market direction; you can decide for yourself by looking at a stock chart of the S&P500, read this article for further information on stock market direction.


Stock Rover Simply The Best Tool For Investors

Investing In Stocks Can Be Complicated, Stock Rover Makes It Easy.

Stock Rover is our #1 rated stock investing tool for:
★ Growth Investing - With industry Leading Research Reports
★ Value Investing - Find Value Stocks Using Warren Buffett's Strategies
★ Income Investing - Harvest Safe Regular Dividends from Stocks

"I have been researching and investing in stocks for 20 years! I now manage all my stock investments using Stock Rover." Barry D. Moore - Founder: LiberatedStockTrader.com

Get Stock Rover Premium Plus Now or Read the In-Depth Stock Rover Review & Test.


CANSLIM Stock Trading System

The CANSLIM stock trading strategy entails deciding how often you will rebalance and rotate the stocks within your CANSLIM portfolio and how much cash you will allocate to each stock.

CANSLIM Portfolio Rebalancing

One example of how you could do it comes from the backtested CANSLIM results in the previously mentioned OPBMII paper. This paper suggests rebalancing the portfolio weekly:

Rebalancing – It should be noted that the system rebalances (re-runs the screen and possibly select new holdings) every week.

Of course, a weekly portfolio rebalance may be time-consuming, so you might want to lengthen it to bi-monthly or monthly. But the rebalance does not need to be expensive, as now there are brokerage accounts like our partner Firstrade that offer $0 commissions. This means a regular rebalance will not cost you anything.

CANSLIM Portfolio Cash Allocation

The CANSLIM backtesting research paper used cash allocation by holding a maximum of 10 stocks, each with 10% of the invested portfolio capital.

Weighting Ideally, the system will select 10% weighting to each position with a maximum of 10 positions.

This, to me, sounds reasonable if you are investing at least $10,000, which would be $1,000 per stock.

Exiting & Selling the Stocks

The academic research suggests buying stocks when they meet the CANSLIM criteria and selling stocks if they lose 7%.

Exits/Closing Positions if a stock drops 7% after purchase, it will be removed but considered at the rebalance the next week (if it still passes criteria).

CANSLIM Stocks 2022

Here is a list of the 42 best CANSLIM stocks selected by the Stock Rover CANSLIM Screener for 2022.

Ticker Company Industry EPS 1-Year Chg (%) 1Y Return vs. S&P 500
RCMT RCM Technologies Engineering & Construction 287%
AAV.TO Advantage Energy Oil & Gas E&P 234%
AAVVF Advantage Energy Oil & Gas E&P 222%
TOU.TO Tourmaline Oil Oil & Gas E&P 98% 164%
AMPH Amphastar Pharmaceuticals Drug Manufacturers – Specialty & Generic 2400% 121%
RNMBF Rheinmetall Industrial Distribution 4007% 119%
IZQVF Indivior Drug Manufacturers – Specialty & Generic 108% 115%
ANDE Andersons Food Distribution 61% 99%
MN Manning & Napier Asset Management 120% 93%
BLMIF Bank Leumi Le-Israel Banks – Regional 65% 73%
IPXHF Inpex Oil & Gas E&P 68%
CLPXF China Longyuan Power Gr Utilities – Renewable 17% 65%
CNR Cornerstone Building Building Products & Equipment 1053% 57%
MUSA Murphy USA Specialty Retail 23% 48%
ADVOF ADVA Optical Networking Communication Equipment 51% 30%
HAIPF Infinya Paper & Paper Products 555% 29%
KKOYF Kesko Grocery Stores 20% 29%
OGE OGE Energy Utilities – Regulated Electric 99% 26%
VRTX Vertex Pharmaceuticals Biotechnology -14% 23%
EZPW EZCORP Credit Services 22%
Y Alleghany Insurance – Property & Casualty 53% 19%
WCN.TO Waste Connections Waste Management 178% 17%
WCN Waste Connections Waste Management 178% 17%
DCNSF Dai-ichi Life Holdings Insurance – Life 38% 16%
AHODF Koninklijke Ahold Delhaiz Grocery Stores 75% 16%
ACHC Acadia Healthcare Co Medical Care Facilities 38% 15%
YMTKF Yamato Kogyo Steel 473% 14%
JFEEF JFE Holdings Steel 14%
FELTF Fuji Electric Co Electrical Equipment & Parts 70% 13%
MRK Merck & Co Drug Manufacturers – General 76% 13%
DWMNF DOWA Holdings Other Industrial Metals & Mining 163% 10%
AEGOF Aegon Insurance – Diversified 9%
K Kellogg Packaged Foods 17% 3%
PSPSF PSP Swiss Prop Real Estate – Diversified 78% 1%
CWQXF Castellum Real Estate – Development 28% 0%
NLTBF Nolato Conglomerates 15% -4%
KMRCF Komori Specialty Industrial Machinery -5%
KACPF Koa Electronic Components 143% -6%
FMMFF Fuji Specialty Industrial Machinery 20% -6%
HURN Huron Consulting Group Consulting Services 163% -12%
REGI Renewable Energy Gr Oil & Gas Refining & Marketing 125% -14%
RSTRF Restaurant Brands Intl Restaurants 57% -21%

CANSLIM Stocks 2021

Here you will find a selection of CANSLIM stocks discovered as part of our CANSLIM scan using Stock Rover in January 2021.

Ticker Company Sector
ACLS Axcelis Technologies Technology
AMAT Applied Materials Technology
AMKR Amkor Technology Technology
ASMLF ASML Holding Technology
CCMP CMC Materials Technology
ENTG Entegris Technology
KLAC KLA Technology
LRCX Lam Research Technology
MKSI MKS Instruments Technology
MXIM Maxim Integrated Products Technology
NVMI Nova Measuring Technology
TER Teradyne Technology
TOELF Tokyo Electron Technology
ACNDF Ascendas India Trust Real Estate
LEGIF LEG Immobilien Real Estate
WPTIF WPT Industrial REIT Real Estate
BAH Booz Allen Hamilton Industrials
CLCT Collectors Universe Industrials
CSWI CSW Industrials Industrials
GNRC Generac Hldgs Industrials
PRIM Primoris Services Industrials
ROCK Gibraltar Industries Industrials
SDVKF Sandvik Industrials
TTEK Tetra Tech Industrials
UPNRF Uponor Industrials
WEICF Weichai Power Industrials
ALXN Alexion Pharmaceuticals Healthcare
CRL Charles River Healthcare
ENSG Ensign Group Healthcare
GGNDF GN Store Nord Healthcare
IART Integra Lifesciences Healthcare
LH Laboratory Corp Healthcare
LMAT LeMaitre Vascular Healthcare
PCRX Pacira BioSciences Healthcare
REGN Regeneron Pharmaceuticals Healthcare
RGEN Repligen Healthcare
SUPN Supernus Pharmaceuticals Healthcare
TECH Bio-Techne Healthcare
ABCB Ameris Bancorp Financial Services
AX Axos Financial Financial Services
COWN Cowen Financial Services
FBC Flagstar Bancorp Financial Services
HTH Hilltop Holdings Financial Services
IBKR Interactive Brokers Group Financial Services
KNVKF Kinnevik Financial Services
MFC Manulife Financial Financial Services
MFC.TO Manulife Financial Financial Services
MS Morgan Stanley Financial Services
NBN Northeast Bank Financial Services

CANSLIM Investing Strategy Summary

I hope you found this guide useful, not just for learning about CANSLIM but also for practically understanding the strategy and implementing it into a cohesive methodology using a stock screener. We explored the system’s historical performance and found that it has merit and could be a solid solution to stock selection and portfolio management.

Video: Find Great CANSLIM Stocks With Stock Rover

 

Open A Stock Rover Account Read the Full Stock Rover Review

 


Are You Looking For Stock Investing & Trading Software? Here Are My Favorites.

My favorite software for trading is TradingView because it does everything well. It has backtesting, great charts, stock screening, and an active community of over 3 million people sharing ideas, plus a free plan available globally.

My favorite software for investing is Stock Rover, as it specializes in deep fundamental financial screening, research, and portfolio management. It is the ideal platform for dividend, value, and growth investing.

My favorite software for stock market news is Benzinga Pro, with its super-fast real-time news engine, squawk box, and news impact ratings.

My favorite AI trading software is TrendSpider which enables automatic pattern recognition for Trendlines, Candlesticks, and Fibonacci levels. Trade Ideas uses AI to generate high probability daily trading signals for auto-trading.

My favorite stock-picking service is Motley Fool Stock Advisor, which has a proven track record of beating the market with excellent stock research reports.

Read the Full Top 10 Stock Market Software Testing & Review

Great Stock Porfolio Examples
20 Years of Research & Analysis Uncovers 13 Profitable Stock Investment Portfolios Examples, Including Specific Stock Selection Samples.

8 COMMENTS

  1. Thank you for the helpful article.

    Regarding the note under Exiting & Selling the Stocks “The tests also sold stocks if they lost 7%, O’Neill suggested 20%, but I find 20% too much to risk on any one trade.”

    O’Neill’s does not suggest waiting until you lose 20% to sell. His rule matches the test which is to sell if you lose 7% to 8%. This may be a mix-up with his suggestion to sell once you have gained 20% unless you gain 20% quickly which may signal more gains to come.

  2. Great analysis and explanation. I tried LSTB method starting last October and I am happy with it. I am going to try this strategy with 10% of my account with all of it divided equally among 10 stocks.

  3. Doesn’t the CANSLIM strategy utilize a relative strength rank (vs competitors)? It appears that the screener shown is using the Relative strength index > 69 (oversold vs overbought). Wouldn’t a RSI >70 indicate the stock is being overbought and due for a declining adjustment?

LEAVE A REPLY

Please enter your comment!
Please enter your name here