All of us have to admit one thing picking stocks with growing capacity is turning difficult. There is always a tug-of-war between fundamental and technical analysis. Many of the investors could not choose one route of analysis between the two. Therefore, they can’t utilize both analytical paths together. In today’s topic, we will guide you to use the two together, the system is called CAN SLIM Investing System. The model was developed by the founder and chairman of Investor’s Business Daily, Willian J. O’Neil. One of this strategy’s main objectives is to identify companies with strong fundamentals and positive market trends. The article will reflect Can Slim Investing System Review and Results in India.
What is the Can Slim Investing System?
The term CAN SLIM is mainly an acronym that represents seven characteristics which are as follows:
- Current Quarterly Earnings
- Annual Earnings Growth
- New Product or Service
- Supply and Demand
- Leader or Laggard
- Institutional Sponsorship
- Market Direction
Components of the Can Slim Investing System
Current Quarterly Earnings
In CAN SLIM, C stands for Current Quarterly Earnings. When the current earning of a company is 25% up in the most recent financial quarter in comparison to the same quarter in the previous year, this refers to valid Current Quarterly Earnings.
Annual Earnings Growth
Here, A stands for Annual Earnings Growth. This Annual Earnings Growth should be up to a minimum of 25% or more over the last three years and Annual returns on equity are 17% or more.
New Product, Service, Management or Price High
N refers New Product or Service. That means a company must continue development and innovations. Innovative companies always have a strong possibility of growth in the future.
Supply and Demand
S is for Supply and Demand. Most of the investors demand a limited supply of shares. Try to find out heavy-volume accumulation by institutional investors, basically at the buy points.
Leader or Laggard
Investors are generally looking to buy leading stocks in leading industry groups or sectors. If they want to look for the best of the best, they must choose efficient leadership.
A variety of professional investments, such as pension funds, and mutual funds, account for about 75% of all market activity. It is essential for a stock to have an institutional interest. The more funds have a stock in their portfolio, the better.
Many famous stock analysts show 3 out of 4 stocks follow the market’s trend. Hence, it is advisable to trade in sync with the market. Never buy a stock when the overall market is weak.
Review of the Can Slim Investing System
The CAN SLIM investing system has been popular among traders for decades due to its impressive track record of success. The strategy incorporates seven key points formulated by the investor and financial analyst, William O’Neil. These principles focus on buying stocks while they are in a price uptrend and selling them when the momentum begins to recede. Additionally, researching companies fundamentals such as their earnings per share is strongly encouraged along with paying close attention to any news or developments that could potentially affect your holdings. Overall, I would recommend this tried-and-true approach not only because of its successful track record but also because it is informative and can help keep investors focused on the necessary components of trading wisely.
Yes, the CANSLIM method has been proven to be effective for picking stocks and achieving returns in the markets. Utilizing a combination of technical and fundamental analysis means investors can identify high-potential stocks with solid long-term growth prospects.
You can qualify for CANSLIM stocks by assessing factors such as market trends, demand-supply forces, pricing structures, volume levels, etc, through comprehensive stock research. This involves researching different facets of each company before making an investment decision. You can create a CANSLIM stock scanner on the Screener website.
YES! The stock market is inherently risky and there is a possibility that your investments can lose value or even become completely worthless over time. It’s important to understand that prices fluctuate all the time, so your investments could go up or down depending on market conditions. Therefore it is essential to have an adequate understanding of the risks associated with investing prior to committing resources to it.
We suggest you read the following book by William J. O’Neil: How to Make Money in Stocks Getting Started: A Guide to Putting Can Slim Concepts Into Action.
The Can Slim Investing System is a sound and effective approach to investing. It combines fundamental analysis with technical analysis to provide an all-encompassing way of evaluating stocks for investment potential. Taking into account the different elements that can affect a stock’s performance, it helps people make more informed and safer decisions when trading or investing in equities. Ultimately, this system can be a valuable tool when used correctly by investors who have knowledge about the market as well as the discipline and patience needed to take advantage of its powerful methods.