The CAN SLIM strategy, popularized by William O’Neil in his classic book How to Make Money in Stocks, is a growth investing system that combines fundamental and technical analysis. It’s designed to identify market leaders with strong earnings, accelerating sales, and institutional support, while also requiring a favorable market backdrop and technical strength. The acronym stands for Current earnings, Annual earnings, New products or management, Supply and demand, Leader or laggard, Institutional sponsorship, and Market direction. By screening for stocks that meet these criteria, investors aim to pinpoint positions with explosive potential before they peak. Running such a screen recently turned up Lifeway Foods Inc (NASDAQ:LWAY), which ticks many of the boxes O’Neil outlined.

Why Lifeway Foods Meets the CAN SLIM Criteria

• C – Current Earnings and Sales Growth: The most recent quarterly earnings per share (EPS) skyrocketed by 2,900% year-over-year, far above the system's 20% minimum. Sales growth for the same period hit 36.71%, easily clearing the 25% threshold. O’Neil stresses accelerating sales and earnings as the fuel for sustained price moves, and Lifeway’s numbers here are exceptional.
• A – Annual Earnings Increases: Over the past three years, Lifeway’s EPS growth has averaged 145.88%, massively exceeding the 25% to 50% O’Neil recommends reviewing for consistent profitability. Additionally, its Return on Equity (ROE) stands at 16.60%, comfortably above the 10% minimum the strategy uses to confirm efficient profit generation.
• N – New Products and Highs: Lifeway produces drinkable kefir and other probiotic foods, tapping into the growing functional foods trend. While the system seeks new highs off proper chart bases, Lifeway’s recent price action and bullish flag pattern—noted in our technical analysis—suggest it may be forming such a base.
• S – Supply and Demand: With a Debt/Equity ratio of just 0.08, Lifeway has virtually no debt, which O’Neil sees as a positive supply-side characteristic. Its strong volume surges over the last few days also signal healthy demand.
• L – Leader or Laggard: Lifeway’s ChartMill Relative Strength of 84.03 means it outperforms 84% of all stocks. It also ranks in the top 9% of its Food Products industry peers, qualifying as a clear market leader.
• I – Institutional Sponsorship: Institutional ownership sits at 43.03%—well below the 85% ceiling the system uses to avoid overcrowded positions. This leaves plenty of room for more institutional buying, which typically drives prices higher.
• M – Market Direction: With the S&P 500’s long-term and short-term trends both positive, the market environment is supportive for aggressive growth positions, aligning with O’Neil’s advice to only buy in bull markets.

Technical and Fundamental Snapshot

Our fundamental report gives Lifeway a rating of 6 out of 10, highlighting excellent profitability (ROA, ROE, and margins all above industry averages) and outstanding past and future growth rates. The health score is solid, supported by a zero-debt balance sheet and a strong Altman-Z score of 13.18. The technical report scores 9 out of 10, reflecting consistent upward trends across daily, weekly, and monthly timeframes, with the stock currently showing a bullish flag pattern. Both reports are available in full here: Fundamental Analysis and Technical Analysis.

Find More CAN SLIM Candidates

This is just one example of what the CAN SLIM methodology can uncover. For a broader list of stocks meeting the same stringent criteria—including minimum 20% EPS growth, 25% revenue growth, and high relative strength—you can run the full screener yourself. Access the complete configuration here: CANSLIM High Growth Screen.

This article is for informational purposes only and does not constitute investment advice. Always conduct your own research or consult a professional before making any trading decisions.

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