Analysis using stock screeners
Finding the right stock to buy can be an arduous task for any investor. There are approximately 20,000 public traded companies in United States. You can even count them, then how can you analyze them and find the best ones out of these? This is where stock screeners come in. Analysis using stock screeners is one of the best ways to shortlist the potential companies of which the stocks can be bought.
What is stock screening?
Stock screening is a process of searching the companies which satisfy a given financial criteria. It can be used to do technical analysis of stocks. These criteria is different for each investor therefore it is impossible to set one set of rules to search the potential companies. Stock screeners use a search engine which will take the criteria provided by the investor, then it will search the database having all financial data for all listed companies. Then it will throw out a list of companies which match the given criteria. It is very useful for the investors since most of their research work is done and now they can concentrate on only a few companies to do further research.
The stock screener search engine can take any parameter from the financial terms. For example, you can give criteria like – a large cap company having P/E ratio less than 15 which is at its all high high currently. This is just an example and you can give any number of parameters.
The stock screeners can be used to shortlist companies based on any tangible variables like market capitalization, revenue, volatility and profit margins, as well as performance ratios such as the P/E ratio or debt-to-equity ratio. It cannot be used for non-tangible or debatable criteria like best services or best products.
Most Popular Stock Screeners
There are various stock screeners available over the internet. But there are 3 websites which are most popular in providing this service. These websites are Yahoo Finance, MSN Money and Morning Star. And the best part is that all these websites provide this service for free.
All these websites provide a basic stock screener as well as a advanced stock screener. Basic stock screener has some pre-determined set of parameters which can be used to shortlist the stocks. This screener is not customizable. Most of the time this screener is sufficient for the analysis of a beginner stock investor. The advanced stock screener is very customizable therefore it asks for more data to be fed from the user. It will basically ask for 3 things – the criterion (the variable), the value and the condition.
Analysis using stock screeners is very helpful when you know your criteria for choosing the company stock but you don’t have time to research all companies in that sector/market cap.
Related posts:
- Best stock analysis websites – Stock analysis sites which you can use
- Top blue chip stocks and investing blue chip stocks for long term
- Quantitative analysis of stocks
- Fundamental Analysis of Stocks
- Historical stocks prices and historical stock quotes – How to get them?
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