CAN SLIM(2)

Current Earnings Growth(1)

Research shows that earnings growth is the single most important indicator of a stock's potential to make a big price move.

The stocks you select should show a major percentage increase in current quarterly earnings per share (the most recently reported quarter) when compared to the prior year's same quarter.


Winning Characteristics

Large increases in current quarterly earnings per share.

Look for these increases to be at least 25%. (Three out of four of the best-performing stocks in our research showed earnings increases of 70% or more in the quarter right before they started to make their huge price moves!)

Preferably, look for accelerating earnings in at least the three most recent quarters.

Check earnings consensus estimates to make sure the company is projected to be on a positive track.


Investing Tip:

The best stocks often have high - some would say ridiculous - P/E ratios when they start their big climbs.

If you weren't willing to pay the higher P/Es, you eliminated most of the best stocks of all time.