Written By
Paul Tracy
Updated June 12, 2021

What is CAN SLIM?

CAN SLIM is an investing system that uses seven fundamental and technical traits to pick stocks.

How Does CAN SLIM Work?

The system, developed in the 1950s by Investor's Business Daily founder William J. O'Neil, relies on seven traits.
1. C = Current quarter earnings growth of at least 25% (some say 18%-20%)
2. A = Annual earnings growth of at least 25% for the past three years.
3. N = New product, service, management or price high.
4. S = Supply of the stock is less than the demand, often marked by heavy accumulation by institutional investors and/or smaller float size.
5. L = Leading stock in a leading industry group, often measured by a relative strength index rating of at least 70.
6. I = Institutional investors (usually at least three) account for about 75% of the stock's activity.
7. M = Market and stock are heading in the same direction.

Why Does CAN SLIM Matter?

CAN SLIM rests on the philosophy that high-performing stocks show high current and long-term profit growth, show market leadership, have institutional sponsorship, and follow the overall direction of the market. Under this system, cheap stocks are often put aside because they are "cheap for a reason." The idea is to have a way to wade through the thousands of stocks on the market, remove emotion from investing and combine the most favorable aspects of value, growth, fundamental and technical analysis. For the 10 years ended 03/31/17, the CAN SLIM method returned 15.4% annually compared with 5.2% annual returns for the S&P 500, according to the American Association of Individual Investors.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about CAN SLIM.
Be the first to ask a question

If you have a question about CAN SLIM, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about CAN SLIM, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about CAN SLIM

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms