C: Current Quarterly Earnings Growth
Filter: Net Profit > 25% YoY
Reason: Look for companies with a strong quarterly earnings growth compared to the same quarter of the previous year.
A: Annual Earnings Growth
Filter: Sales Growth 5Years > 15% AND Net Profit Growth 5Years > 15%
Reason: Companies should have a consistent 5-year growth rate in both sales and profits.
N: New Product, Service, or Management
This can be subjective and is often better analyzed qualitatively. However, you might use a proxy like:
Filter: Return on Capital Employed (ROCE) > 15%
Reason: High ROCE can indicate efficient management and potential new growth initiatives.
S: Supply and Demand
Filter: Price to Earnings < 20 AND Market Capitalization > 500
Reason: Look for companies with reasonable valuations and strong market presence.
L: Leader or Laggard
Filter: Relative Strength > 0
Reason: Select companies showing strength relative to the market.
I: Institutional Sponsorship
Filter: FII holding > 10%
Reason: Look for companies with a strong institutional presence, indicating confidence in the stock.
M: Market Direction
Not directly filterable, but you can check the overall market trend to ensure you’re investing in an uptrend.
Additional Filters:
Debt to Equity Ratio < 0.5: Ensure the companies are not overly leveraged.
Cash from Operating Activities > Net Profit: This ensures that the profits are supported by real cash flows.
Save and Run the Screener:
After setting up these criteria, save your screener and run it to get a list of companies that match the Canslim strategy.
Analyze and Refine:
Review the companies that meet the criteria. You can further refine the screener based on specific industry trends or by adding more filters like PEG ratio, promoter holding, etc.