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How Does a Company's New Idea Aid in Stock Selection?

Companies, much like people, can get stuck in a rut. Without innovation, a company will eventually die. But before it does, it will see its stock prices plummet, and take any investor still clinging to it down as well. Consequently, CANSLIM stock strategy emphasizes the importance of new ideas to a business. In fact, the "new" in CANSLIM may refer to a new product, entrance into a new and untapped market, or perhaps even a recent management upheaval. Any new factor that can provide a clearer picture of where the company is headed will aid in stock selection.