{"id":3466,"date":"2018-10-31T09:00:09","date_gmt":"2018-10-31T03:30:09","guid":{"rendered":"http:\/\/capitalante.com\/?p=3466"},"modified":"2019-02-27T10:39:49","modified_gmt":"2019-02-27T05:09:49","slug":"how-to-pick-quality-stocks-by-can-slim-strategy","status":"publish","type":"post","link":"https:\/\/capitalante.com\/how-to-pick-quality-stocks-by-can-slim-strategy\/","title":{"rendered":"How to Pick Quality Stocks by CAN SLIM Strategy"},"content":{"rendered":"<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">To select a stock that can give you better returns is a difficult jargon to solve. Usually, investors make use of fundamental analysis of stocks, qualitative analysis of stocks, technical analysis of stocks to check out the company\u2019s or the stock\u2019s health and try to predict whether it is able to deliver the desired return in the near future just say after 10 years or more. Many investors treat the combination of the fundamental and technical analysis as the killing strategy. This combined strategy is called CAN SLIM. In this <g class=\"gr_ gr_96 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"96\" data-gr-id=\"96\">column<\/g> we will discuss how to pick quality stocks by CAN SLIM strategy.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">What is CAN SLIM Strategy<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">CAN SLIM strategy is used by many investors as an investment strategy which involves the above said ways of analysis to find out the best stocks. This strategy stands on the pillars of the Earning, New product or service, Supply and demand, Leader or laggard, Institutional sponsorship <g class=\"gr_ gr_80 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"80\" data-gr-id=\"80\">and<\/g> Market direction. This strategy enables investors to make <g class=\"gr_ gr_78 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins doubleReplace replaceWithoutSep\" id=\"78\" data-gr-id=\"78\">investment<\/g> before they start a bull run or in other <g class=\"gr_ gr_79 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"79\" data-gr-id=\"79\">words<\/g> is overvalued.<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000; font-family: georgia, palatino, serif; font-size: 14pt;\">Read also:<span style=\"color: #ff0000;\">\u00a0<a href=\"https:\/\/www.investopedia.com\/university\/stockpicking\/stockpicking7.asp\" ping=\"\/url?sa=t&amp;source=web&amp;rct=j&amp;url=https:\/\/www.investopedia.com\/university\/stockpicking\/stockpicking7.asp&amp;ved=2ahUKEwiKmrrPy-XdAhUaU30KHZSnDlYQFjADegQIAhAB\" target=\"_blank\" style=\"color: #ff0000;\" rel=\"noopener noreferrer\">Stock-Picking Strategies: CAN SLIM &#8211; Investopedia<\/a><\/span><\/span><\/li>\n<li><span style=\"color: #000000; font-family: georgia, palatino, serif; font-size: 14pt;\"><span style=\"color: #000000; font-family: georgia, palatino, serif; font-size: 14pt;\"><span style=\"color: #000000; font-family: georgia, palatino, serif; font-size: 14pt;\">Read also:<span style=\"color: #ff0000;\">\u00a0<\/span><\/span><\/span><\/span><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #ff0000;\"><a href=\"https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/look-for-quality-can-slim-model-throws-up-these-10-stocks\/articleshow\/65019167.cms\" ping=\"\/url?sa=t&amp;source=web&amp;rct=j&amp;url=https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/look-for-quality-can-slim-model-throws-up-these-10-stocks\/articleshow\/65019167.cms&amp;ved=2ahUKEwie1-_o1KneAhULMY8KHfzZBjgQFjABegQICBAB\" style=\"color: #ff0000;\" target=\"_blank\" rel=\"noopener\"><\/a><a href=\"https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/look-for-quality-can-slim-model-throws-up-these-10-stocks\/articleshow\/65019167.cms\" target=\"_blank\" style=\"color: #ff0000;\" rel=\"noopener noreferrer\">Stocks: Look for quality? CAN SLIM model throws up these 10 stocks<\/a><\/span><\/li>\n<\/ul>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">C = Current Quarterly Earnings<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Current quarterly earnings reveal a company\u2019s current performance. It shows the results done by the company in the last quarters. In this method of current quarterly earnings, investors actually watch out those companies which have generated an EPS growth of at least 20% in the recent quarters over the past 3 years. As an investor, you should invest in such a company which has delivered at least 15% sales growth during <g class=\"gr_ gr_122 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"122\" data-gr-id=\"122\">last<\/g> 10 quarters.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">A = Annual Earnings Growth<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Before making <g class=\"gr_ gr_87 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"87\" data-gr-id=\"87\">investment<\/g> in any company you need to watch out carefully the respective stock\u2019s annual growth. You should invest in such stocks which have delivered a satisfactory annual growth of 25% over the past 3 or 5 years.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">N = New Product or Service<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">As the full form itself expresses, you need to keep eye on the new product or service launched by the company in which you are going to invest. It is important for any company to launch <g class=\"gr_ gr_117 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"117\" data-gr-id=\"117\">new<\/g> product or service to enter in the broad market. Let\u2019s make it clear with an example. Maruti Suzuki is one of the famous car companies in the world. When Maruti introduced a new Duster to hard competition to Hyundai, it was successful. Then it increased Maruti Suzuki\u2019s profit margin and EPS.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">S = Supply and Demand<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">There is a rule of \u2018Law of demand\u2019 which was delivered by Alfred Marshall in the year of 1936. This law tells us when the demand increases then the price also moves to <g class=\"gr_ gr_119 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins doubleReplace replaceWithoutSep\" id=\"119\" data-gr-id=\"119\">upward<\/g> direction. This rule can be applied in <g class=\"gr_ gr_120 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"120\" data-gr-id=\"120\">share<\/g> market also. Strong demand for a particular stock which has strong fundamental and earning numbers drive the stock\u2019s price upwards. Mutual fund agencies and other institutional investors tend to invest in highly demanded stocks. This tendency leads to <g class=\"gr_ gr_121 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"121\" data-gr-id=\"121\">sharp<\/g> price increase of those stocks or shares.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">L = Leader or Laggard<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">In any <g class=\"gr_ gr_77 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"77\" data-gr-id=\"77\">industry<\/g> there are many leaders or laggards. Leaders provide <g class=\"gr_ gr_76 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"76\" data-gr-id=\"76\">better<\/g> return on equity than the industry average on the wings of robust earnings. On the other hand, laggards yield far below than the industry average just because of deteriorating earnings.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">I = Institutional Sponsorship<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">This method expresses that a stock can be a winner if owned by any banks, Govt. authorities, Mutual funds, Pension funds <g class=\"gr_ gr_103 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"103\" data-gr-id=\"103\">and<\/g> other institutional Investors. Such ownership confirms a stock\u2019s reliability and robust performance. The fund manager and his research team of Mutual funds make <g class=\"gr_ gr_101 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-del replaceWithoutSep\" id=\"101\" data-gr-id=\"101\">a proper<\/g> research and check various aspects before investing in that stock. When these mutual funds or institutional investors make an investment or increase their stake in any stock, you are free to invest in that stock. You can prefer such stocks which have at least 10 institutional investors.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">M = Market Direction<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">At the time of making <g class=\"gr_ gr_83 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins doubleReplace replaceWithoutSep\" id=\"83\" data-gr-id=\"83\"><g class=\"gr_ gr_92 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"92\" data-gr-id=\"92\">investment<\/g><\/g> you should check the trend of <g class=\"gr_ gr_84 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"84\" data-gr-id=\"84\">market<\/g> whether it is bull or bear. There is <g class=\"gr_ gr_86 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"86\" data-gr-id=\"86\">75<\/g>% chance that the bull market will show upward results and the bear market will show downward results in the near term. But if you are a long term investor then you need <g class=\"gr_ gr_91 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"91\" data-gr-id=\"91\">not<\/g> worry about the volatility in <g class=\"gr_ gr_89 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"89\" data-gr-id=\"89\">stock<\/g> market in the near term.<\/span><\/p>\n<h6 style=\"text-align: center;\"><span style=\"font-family: georgia, palatino, serif; font-size: 18pt; color: #0000ff;\">How to pick Quality Stocks by CAN SLIM Strategy<\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Many investors are more concerned about the price i.e., P\/E ratio of the stocks. They forget the fact that these shares are trading on higher valuations than the cheap valuations shares for a reason. Just <g class=\"gr_ gr_110 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"110\" data-gr-id=\"110\">analyse<\/g> <g class=\"gr_ gr_107 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-del replaceWithoutSep\" id=\"107\" data-gr-id=\"107\">the every<\/g> term before picking quality stocks by making use of CAN SLIM strategy. The Titan Company traded at P\/E level of 60 in 2016. Many investors thought that this would not deliver so much return in the near future. But Titan Company is making record day by day and after one year it is now trading at P\/E level of 78 in 2018 with the help of new product launch and robust earnings growth quarter-on-quarter. <\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">By this robust performance, mutual funds get attracted eventually to this kind of companies and create a spike in demand of that specific stock or share. This spike of demand enables a stock to move upward price direction and so forth. You must not rely only on the P\/E ratio only. You <g class=\"gr_ gr_113 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"113\" data-gr-id=\"113\">need<\/g> focus on sustainable business model and sustainable competitive advantage of a stock. CAN SLIM strategy enables an investor to find such businesses or stocks which have all of the above said features even if they do not trade at cheap valuations.<\/span><\/p>\n<ul>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Read also:<span style=\"color: #ff0000;\">\u00a0<a href=\"http:\/\/capitalante.com\/fundamental-analysis-of-stocks-step-by-step\/\" title=\"Fundamental Analysis of Stocks For Beginners\" rel=\"bookmark noopener noreferrer\" target=\"_blank\" style=\"color: #ff0000;\">Fundamental Analysis of Stocks For Beginners<\/a><\/span><\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\"><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\"><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\"><span style=\"color: #000000;\">Read also:<span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #ff0000;\">\u00a0<\/span><\/span><\/span><\/span><\/span><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #ff0000;\"><\/span><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #ff0000;\"><a href=\"http:\/\/capitalante.com\/how-to-use-price-to-earnings-ratio-to-pick-stocks\/\" target=\"_blank\" style=\"color: #ff0000;\" rel=\"noopener noreferrer\">How to use Price to Earnings Ratio to Pick Stocks<\/a><\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #0000ff;\">If you have any question regarding CAN SLIM Strategy feel free to comment so that we have a discussion. If you have found this post helpful share with your loved ones.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>To select a stock that can give you better returns is a difficult jargon to solve. Usually, investors make use of fundamental analysis of stocks, qualitative analysis of stocks, technical analysis of stocks to check out the company\u2019s or the &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"How to Pick Quality Stocks by CAN SLIM Strategy\" class=\"read-more button\" href=\"https:\/\/capitalante.com\/how-to-pick-quality-stocks-by-can-slim-strategy\/#more-3466\">Continue Reading<span class=\"screen-reader-text\">How to Pick Quality Stocks by CAN SLIM Strategy<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":3653,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[110],"tags":[],"_links":{"self":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/posts\/3466"}],"collection":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/comments?post=3466"}],"version-history":[{"count":0,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/posts\/3466\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/media\/3653"}],"wp:attachment":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/media?parent=3466"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/categories?post=3466"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/tags?post=3466"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}