Guide
O'Neil's CANSLIM Framework
CANSLIM is an acronym coined by William J. O'Neil, founder of Investor's Business Daily, and laid out in his book How to Make Money in Stocks. Each letter stands for one characteristic O'Neil's research associated with stocks that produced large advances. Unlike a purely technical filter, CANSLIM deliberately blends fundamental factors (earnings, institutional ownership) with technical ones (price near highs, volume behavior).
It is worth being precise about what kind of framework this is. O'Neil's approach came from studying the characteristics that top-performing stocks shared before their biggest moves. That is a legitimate and useful method, but it is retrospective by construction — it describes what winners looked like, which is not the same as a rule that identifies future winners. Treat it as a description of a profile worth examining, not a formula.
The seven factors
C Current quarterly earnings
O'Neil looked for strong year-over-year growth in quarterly earnings per share — his often-cited threshold was 25% or better. The reasoning is straightforward: a sharp acceleration in recent profitability is the kind of change that attracts institutional attention and re-rates a stock.
Comparing a quarter to the same quarter a year earlier, rather than to the prior quarter, controls for seasonality — a retailer's fourth quarter is not comparable to its third.
A Annual earnings growth
Meaningful growth over several years, commonly cited around 20%+ annually. Where the C factor catches a recent inflection, the A factor is meant to distinguish durable growth from a single good quarter driven by a one-off event.
A company can post one spectacular quarter for many reasons that have nothing to do with the business compounding. Requiring both C and A is intended to filter those out.
N New highs, new products, new management
The broadest of the seven. O'Neil argued that big advances typically coincide with something genuinely new at the company — and, critically, that the stock should be making new price highs rather than sitting well below prior peaks.
This is the same overhead-supply logic that appears in the Trend Template's 52-week-high criterion, arrived at from a different direction. Automated screens can measure the price-high portion reliably; "new product" and "new management" require human judgment and are not something any scanner should claim to assess.
S Supply and demand
Observable primarily through volume. A stock advancing on volume well above its own average suggests genuine accumulation rather than drift. O'Neil also considered share count — a smaller float can move more sharply on the same amount of buying.
Volume is the closest thing a chart offers to a measure of conviction. Price tells you where; volume hints at how many participants agreed.
L Leader, not laggard
Buy the strongest names in a strong group, not the cheap-looking straggler in the same industry. O'Neil expressed this through relative strength — the same percentile-rank concept the Trend Template's eighth criterion uses, typically with a higher bar (80+) for leadership.
The temptation to buy the laggard on the theory that it will "catch up" is one of the most persistent and expensive habits in retail investing. Frequently, the laggard is lagging for a reason.
I Institutional sponsorship
Large advances generally require large buyers. Funds, pensions, and other institutions move size that individual investors cannot. O'Neil wanted to see meaningful institutional ownership, and ideally an increasing number of institutional holders.
Note the tension: too little sponsorship means no engine for a sustained move, but a stock already universally owned by institutions has less room for new demand. O'Neil favored increasing sponsorship over maximum sponsorship.
M Market direction
O'Neil considered this the single most important factor, and it is the one most often ignored. His research indicated that a large majority of stocks follow the general market's direction. Buying textbook setups during a market-wide correction produces a much lower success rate than the same setups in a confirmed uptrend.
This is the only factor that is not about the individual stock at all. Our screen displays it as a market status indicator at the top of the page rather than as a per-stock score, because that is what it is.
Where automated screening runs into limits
Several CANSLIM factors depend on fundamental data that is inconsistently available through free data sources. Our screen pulls earnings growth, profit margin, debt levels, and institutional ownership where they are published, but coverage varies by company. Our approach when a field is missing is to skip it rather than penalize the stock, since an absent data point is not evidence of a weak fundamental — it is an absent data point.
This is a real limitation and worth stating clearly: a stock's CANSLIM score on this site reflects the factors that could be measured, not a complete assessment. The detail view for each stock lists exactly which signals were found, so you can see what the score is actually based on. Anyone using this seriously should verify fundamentals against company filings rather than relying on any automated aggregation, including ours.
Two factors — "new products or management" under N, and the qualitative half of leadership under L — are not machine-assessable in any honest sense and are not scored here at all.