Stock Market Screener

A tool to help find the market gems!



A stock market screener and a mutual fund screener are tools value investors can use to filter stocks and mutual funds given certain criteria of their choice. Another name used is a share filter.

By using a stock screening tool, a value investor is able to use a set of financial criteria that he or she requires to find desirable companies.

By using this tool you can save a lot of research time with a few clicks of a mouse.


How Do They Work?

A stock screener has three aspects: a database of companies, a set of variables and a screening engine that finds the companies that satisfy those criteria. A list of matches is then generated.

By focusing on the numeric factors affecting the value of a stock, stock screeners help their users perform fundamental analysis.

Screening focuses on variables such as market capitalization, debt to equity ratio, earnings per share growth, payout ratio, profit margins ... and so on, depending on the complexity of the screener.


Types and Examples of Screeners

Examples of U.S. free stock screeners on the web include those offered by Yahoo Finance, MSN Money and Morningstar. They have basic screeners and advanced screeners. Some offer a deluxe stock screener.

Morningstar have also built some screens with analyst-selected criteria for different types of stocks that might be of interest.

Examples of other types of screener available on the web include ...

I use a free stock market screener covering Australian stocks on the Australian Stock Exchange (ASX) made available by ComSec, a major online stock broker. You need to register with ComSec in order to access it.

Although there are some good free screeners available on the web, if you want the very latest and the very best stock screener, you may need a subscription to a screening service.


Choosing Criteria

The big challenge with using screeners is knowing what criteria to search for. The hundreds of variables make the possibilities for different combinations nearly endless.


If you don't know the characteristics of the companies you are looking for, then take the advice of Ben Graham and buy into an index fund.


However, if you aspire to be a value investor like me, you will want to search for companies with high return on equity and return on capital employed, as well as having moderate to low debt and low price earnings ratio.

So I filter for market capitalization greater than $50 million to weed out all the minnows.

I filter for return on equity greater than 15% to find high profitability companies.

I then eliminate companies with debt to equity ratios greater than 50%.

From then on, I eye-ball the companies that are left and get rid of any companies that don't have five years of financial records.


I then consider qualitative factors discussed in another section to refine the list further.

And when I have the refined list of companies that provide the characteristics I am looking for, I put them on a watch list and wait to buy them at a fair price.


To Conclude

For me, an important aspect of using stock market screeners is that they widen my universe of good stocks (defined as exhibiting high return on capital employed), that are available at cheap prices (identified as having low price earnings ratios).

Given the large number of stocks to choose from in any given stock market, I can discover good stocks at cheap prices which I may otherwise never come across in the financial press.


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