CAN SLIM(12)

Leader or Laggard

Winning Characteristics


Look closely at the top 20% of industry groups (Investor's Business Daily tracks 197).

Our study of the greatest stock market winners show the best stocks generally come from the top 22% of industry groups.

Also, you want to avoid the bottom 20% of groups.

Historical analysis also shows stocks within the top half of all industry groups greatly outperform those in the bottom.


The best-performing stocks are generally No. 1 in their industry based on key fundamentals, including return on equity, annual earnings growth, pretax and after-tax profit margins and its relative price strength.

Look for confirmation of strength from at least one other company in the same industry group.


Look for leading stocks:

Our study of the greatest stock market winners found that all-star stocks had, on average, outperformed 87% of the market before they began their most dramatic price advances.

In a manner of speaking, if you want to find next year's winning stocks, look at the better-performing stocks today.


Once a general-market decline is definitely over, the first stocks to bounce back to new price highs are almost always your authentic leaders.