Investing in the stock market requires some mental muscle to sort through all the opportunities and find the best stocks for you.
Tools that help you do research or make comparisons of different stocks are invaluable in cutting down the amount of time you must to spend researching stocks.
At the top of this list are stock screens, which are the most important tool investors can use to find stocks for further analysis.
However, there are many other tools that investors can use that will help cut down the time you spend researching and comparing stocks. One of the best tools is available on Morningstar.com.
It is called Quickrank and it allows you to rank stocks in particular sector by a number of important factors. You find it by clicking on "stocks" on the main navigation and then finding the Quickrank link in the left navigation.
The Quickrank tool from Morningstar allows you to look at the sector and then select how you want to rank stocks in the sector. You can also look at all stocks rather than a single sector.
The ranking fields include a number of key metrics so you can choose the one that is the focus of your current research.
You use the tool by selecting a stock sector (or all stocks) and a metric. When you click on view results the tool ranks the stocks in the sector you picked by the metric to pick.
At the end of the displayed list is an explanation of the metric and what it tells stock investors.
The metrics include:
- Market Cap
- Sales TTM
- Year-to-date total return
- 1 month total return
- 3 months total return
- One year total return
- Three-year total return
- 5 year total return
- Dividend yield
- Return on equity
- Three-year projected earnings growth
- Projected 5 year EPS growth
- Price-to-book ratio
- Price sales ratio
- PEG payback
- Forward PEG ratio
- 1-month relative strengths
One of the most interesting and helpful metrics in the list is projected earnings per share for the next 5 years. Selecting a stock sector from a drop-down box and then go to the ranking feels
Making projections involves a significant amount of work and, if you are like me, most investors are not comfortable making projections.
One of the hardest things investors do is make projections about earnings growth and other key metrics.
After all, a projection is really just a guess with some logic and rational thinking behind.
I don't know if MorningStar's projections or the best that are available however I do know their project and projections will be better than any I can come up with.
You can use this tool and the other metrics that are used to rank stocks to identify likely candidates for further research or to add to your research that is ongoing.
You can find these metrics in many places, but I like the convenience of having them all in one spot. You will not find every key metric you may want to use as a ranking but there are enough be very helpful to most investors.
What this tool offers is a chance to rank stocks on a single metric. This makes it easy to spot high achievers in certain areas as measured by the metrics.
However, you do have to register for Morningstar's free membership.
If you are serious investor Morningstar is a helpful and thorough research resource that you should strongly consider.