The Best Performing Stocks in History

How do you find a stock that can go up 100%, 200%, 500%, or more?

Is there a blueprint that you can develop by studying the best-performing stocks of all time?

These are the questions that William O'Neil, many say the greatest trader ever, asked and investigated when he was a young broker learning the trade.

He looked back in history and studied the greatest stocks and distilled clear characteristics that signal the potential for a stock to become what he called a “Model Book Stock”.

The framework he developed is an acronym: C.A.N.S.L.I.M, with each of the 7 letters standing for one of the key characteristics that he looked for and that we will cover today.

We will also share how Deepvue is the ultimate CANSLIM screener and can be used to quickly and easily find all of the stocks that meet the associated fundamental and technical characteristics.

The CANSLIM Methodology

The allure of CANSLIM lies primarily in its simplicity and intuitive nature. The acronym itself provides a clear roadmap, breaking down the seven fundamental elements investors should consider when assessing potential stock opportunities.

Let's discuss each of the seven key traits (Current Quarterly Earnings, Annual Earnings Growth, New Products or Services, Supply and Demand, Leader or Laggard, Institutional Sponsorship, and Market Direction) that collectively form the CANSLIM acronym.

The 7 Key Traits:

C- Current Quarterly Earnings:

In the CANSLIM Methodology as developed by William J. O’Neil, the goal is to find growing YoY quarterly earnings of at least 25%. O’Neil showed through his analysis that the best stocks generally have earnings that greatly exceed this benchmark, often in excess of triple-digit growth.

Deepvue has access to the most up-to-date historical and estimated future earnings data. It quickly and easily highlights stocks that show significant quarterly earnings growth, ensuring that users can tap into stocks with accelerating growth and strong momentum.

A – Annual Earnings Growth:

The CANSLIM methodology looks for companies with greater than 25% annual earnings growth for each of the past three years. This growth, combined with future estimates for continued annual growth can propel a powerful move in a stock.

Beyond the most recent few quarters, Deepvue allows users to analyze a company's annual earnings trajectory. By examining longer-term earnings trends, it's easier to pinpoint stocks that consistently outperform their peers. You can easily toggle between annual and quarterly numbers depending on your preference.

N – New Products or Services:

The ‘N’ in CANSLIM generally refers to the fundamental story behind the stock’s move. The N refers to something new about the company that the market deems significant. This can be the establishment of a New Management style, introduction of a disruptive New Product, or rollout of an innovative New Service.

In Deepvue, you can easily investigate a company deeper by clicking the accessible link to their website which can be stored in the data panel

S – Supply and Demand:

The general premise of the ‘S’ in the CANSLIM methodology is that a limited supply of shares makes the price easier to propel higher when met by big volume demand than a stock with a much larger supply of outstanding shares.

This characteristic in the methodology stopped making a difference in the early 2000s when big-cap stocks began trading like their counterparts with smaller floats.

Leveraging volume and price data, the Deepvue platform can easily spotlight stocks where there's a surge in buying interest, signifying strong demand, which is often a precursor to upward price movement.

L – Leader or Laggard:

The CANSLIM methodology looks for the strongest stocks in the strongest industry groups, with the most powerful earnings and sales growth. These are the stocks that typically lead a bull market higher.

Deepvue’s comparative tools allow users to stack up a stock against its relevant peers. This makes it straightforward to discern the leaders from the laggards. Ultimately, winning in stocks is all about finding leaders that outperform their competitors.

I – Institutional Sponsorship:

The CANSLIM methodology looks for stocks that are under institutional accumulation. Ideally, we want to see an increasing number of high-quality institutions accumulating shares and building positions in a stock over time. Big volume is usually the giveaway that this phenomenon is taking place.

Deepvue tracks institutional buying and selling activities, providing insights into which stocks are being accumulated or offloaded by big players in the market. A surge in institutional interest can often signal a promising future for a stock.

M – Market Direction:

The ‘M’ in CANSLIM is one of the most important components of the methodology. William J. O’Neil used to say getting the direction of the market correct is more than half the ball game when it comes to making money in stocks.

He went on to say that if you do not get the direction of the market correct the other six traits fail to have any relevance.

The ‘M’ in CANSLIM is one of the most important components of the methodology. In Deepvue, you can analyze the price action of indexes and index ETFs.

Using Deepvue to Find Tomorrow’s Biggest Winners

The platform not only provides a simple, intuitive solution for stock screening but ensures that the CANSLIM methodology's power is at the fingertips of anyone eager to discover potential market winners.

Additionally, Deepvue's user interface is designed for clarity and ease of use. Filters, charts, and analysis tools are neatly integrated, allowing both novice and professional investors to screen stocks using the CANSLIM methodology without a steep learning curve.

CANSLIM Preset Screen in Deepvue:

Frequently Asked Questions (FAQs)