CANSLIM is a growth stock selection methodology originally developed for the US market. SmallCapData adapts its principles for ASX small-cap screening. Here's how each criterion translates to the Australian context.
The Seven Criteria
The screener checks quarterly earnings growth (EPS) year-over-year. For pre-revenue ASX small caps, declining losses can serve as a proxy for improving earnings trajectory.
Multi-year earnings growth consistency. The algorithm looks at trailing annual earnings history and penalises companies with declining earnings trends.
Stocks near or at 52-week highs. Counter-intuitively, stocks making new highs have historically tended to continue higher, while stocks at lows tend to continue lower.
Share supply (float) and volume. Lower float stocks can move faster on limited buying. The screener tracks volume ratios to detect demand shifts.
Relative strength vs the market. Leaders outperform the ASX index; laggards underperform. The screener calculates relative strength rankings.
Institutional ownership percentage. Some institutional backing validates quality, but too much limits upside. The screener uses a balanced range.
The broad market trend. Even the strongest individual stocks struggle when the overall market is in a confirmed downtrend.
ASX-Specific Adaptations
The original CANSLIM framework was designed for US large-caps. For ASX small caps, several adjustments are needed: many companies are pre-revenue (making earnings criteria less applicable), quarterly reporting is semi-annual for most ASX companies, and institutional ownership data is less granular than in the US.
The SmallCapData screener adapts each criterion with proprietary thresholds calibrated to ASX small-cap norms. The evening wrap articles show a daily CANSLIM breakdown of screened signals.
View CANSLIM-flagged signals →