Stock Market Screener
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 a stock market screener you can save a lot of research time with a few clicks of a mouse. 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. 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 could find only one somewhat basic free stock market screener covering Australian stocks on the Australian Stock Exchange (ASX). It requires you to register to use 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. 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 Grahan 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 with a reasonable market capitalisation. So I filter for market capitalisation greater than A$100 million to weed out all the minnows. I filter for return on equity greater than 15% to find high profitability companies. I also filter for debt to equity ratio less than 50% to filter out companies with significant debt. 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 wait to buy them at a fair price.
Return from Stock Market Screener to Good Stocks to Buy
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