CAN SLIM

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CAN SLIM is an acronym that was developed by the American company Investor's Business Daily ( IBD ). CAN SLIM represents seven properties that can be assigned to many stocks that are on the verge of a strong increase in value. The method was developed in the 1950s by William O'Neil, founder of Investor's Business Daily. In 2015, an exchange-traded fund (ETF) was launched with a focus on the IBD 50. This computer generated list is published by Investor's Business Daily and is based on stocks that meet the CAN SLIM criteria.

strategy

CAN SLIM is a stock market strategy that invests in growth stocks and was described as early as 1953 in the book How to Make Money in Stocks: A Winning System In Good Times or Bad . This strategy combines both technical analysis and fundamental analysis .

acronym

The seven parts of the acronym have the following meanings:

  • C stands for current quarterly earnings , the increase in quarterly earnings per share compared to the previous year must be at least 18–20%. Ideally, there must also be a dynamic increase between the individual quarters.
  • A stands for annual earnings growth , i.e. increasing profits over three years with a growth rate of more than 25%. The ROE should be higher than 17%.
  • N stands for New product or service (dt. New products or offers). To generate great growth, new, innovative products or services are often necessary. Therefore, the company should have something that adds value and ensures constant growth.
  • S stands for supply and demand . A high trading volume with rising prices is a positive signal. The daily volume of a share is compared to the average.
  • L stands for Leader or Laggard (German market leader or laggard ). By market leader, O'Neil means the company with the best profit development, high ROE and profit margins and the most dynamic price development.
  • I stands for institutional sponsorship , i.e. institutional investors such as banks, funds or pension funds who can support price developments with high investment volumes. If they buy the company, it is a good indication that there will be sustainable growth.
  • M stands for Market Direction . No matter how convincing any stock fundamentals are, if the overall market moves in the opposite direction, then the chances are high that even the best stocks will be dragged down.

See also

Individual evidence

  1. ↑ a b CAN SLIM . Investor's Business Daily.
  2. ↑ Ky Trang Ho: New ETF Rides On Legendary Investor William O'Neil's Stock Picking Strategy . June 24, 2015.
  3. ^ John Dobosz: Breaking Out With Bill O'Neil. In: Forbes.com. February 23, 2009, accessed September 2, 2017 .

literature

  • William J. O'Neil: How To Make Money With Stocks: Anyone Can Win On The Stock Exchange With This Proven System . Börsenbuchverlag, 2012, ISBN 978-3-942888-43-1 .