Mike
01-06-2014, 03:14 PM
Attached is a pdf file documenting performance of CANSLIM type picks last year. These stocks are not from my watch lists but I had many of these stocks on my watch lists in the stock picker section. These stocks were featured stocks in the Daily Stock Analysis video hosted on investors.com. This list was given to me by one of the authors of Daily Stock Analysis and was told it could be shared in open forums.
What is common to many of the selections is that these stocks are chosen for mid-to-longer-term holding. For a stock to continue running up it usually needs uncommon earnings growth, there are exceptions to every rule of course. We look for stocks showing accelerating earnings over several quarters, at least 25% growth in the last quarter compared to prior year same quarter; much more than 25% is preferred. We also look for companies that are priced in the sweet spot for institutional investors (>$20) and show institutional trading volume (>400K per day, much more preferred). We also want stocks breaking out of a sideways consolidation such as a cup and handle pattern, double bottom, flat base, etc. Other patterns such as breaking above what we call three-weeks tight are also chosen: 3-WT means the price has closed 3 weeks in a row at nearly the same price, a sign of institutional accumulation. EV can also help decide which candidates are showing large player accumulation just before it breaks out or bounces off a key moving average. In the stock picker section I regularly produce a watch list of these type stocks with buy points and comments as to what type of pattern has formed.
I have spot checked a few of the 79 stocks on this list. The percent gain column means the gain from the time of the recommendation and held it until December 31 (end of year). Some of the gains could have been greater following normal sell rules that trigger from time to time on individual stocks. Thus the percent gain columns are the minimum gain available last year. As far as the 14 losing positions most of the losses would have been limited to no more than 7% as that is an absolute CANSLIM selling rule to cut all losses at 7-8%. Gap downs are the obvious exception.
What is common to many of the selections is that these stocks are chosen for mid-to-longer-term holding. For a stock to continue running up it usually needs uncommon earnings growth, there are exceptions to every rule of course. We look for stocks showing accelerating earnings over several quarters, at least 25% growth in the last quarter compared to prior year same quarter; much more than 25% is preferred. We also look for companies that are priced in the sweet spot for institutional investors (>$20) and show institutional trading volume (>400K per day, much more preferred). We also want stocks breaking out of a sideways consolidation such as a cup and handle pattern, double bottom, flat base, etc. Other patterns such as breaking above what we call three-weeks tight are also chosen: 3-WT means the price has closed 3 weeks in a row at nearly the same price, a sign of institutional accumulation. EV can also help decide which candidates are showing large player accumulation just before it breaks out or bounces off a key moving average. In the stock picker section I regularly produce a watch list of these type stocks with buy points and comments as to what type of pattern has formed.
I have spot checked a few of the 79 stocks on this list. The percent gain column means the gain from the time of the recommendation and held it until December 31 (end of year). Some of the gains could have been greater following normal sell rules that trigger from time to time on individual stocks. Thus the percent gain columns are the minimum gain available last year. As far as the 14 losing positions most of the losses would have been limited to no more than 7% as that is an absolute CANSLIM selling rule to cut all losses at 7-8%. Gap downs are the obvious exception.