There are many free stock screening tools available on the Internet (see list below). Investors can use them to narrow investment possibilities down to a manageable number of companies for further analysis.
Stock screens are not stock selection tools. They cant pick winning stocks by themselves, however they can help you become a better investor by helping you stay focused on your particular goals. Screens are valuable for the companies they eliminate as well as the companies they select.
Use the SameMost good stock screens have similar characteristics. Like anything else you find on the Web, some are easier to use than others are.
In addition to being easy to use, the screen should have a robust database of information on each company. At least five years history is the minimum for research purposes.
The screen should contain both absolute and relative information. That is, in addition to sales figures, the screen should show you what has the increase (or decrease) been year-to-year. Percent changes are often more telling than absolute numbers.
Preset OptionsMany Web sites offer you the option of preset screens that have the parameters already built to screen for certain results (growth or value, for example).
These presets are helpful if you are just getting started in screens so you can see how variables are adjusted to get the desired result.
Using RangesThe better screens will allow you to enter a range of values rather than a greater than or less than variable. For example, you may want to look for companies of a certain size.
Entering a range in the market cap field of between $3 and $5 billion will give you a much narrower result than entering less than $5 billion market cap, which will give you all companies down to the smallest listed on the exchanges.
ConclusionThe better stock screens offer a significant database, presets, relative as well as absolute numbers and flexibility in entering parameters.
Here are some of my favorite screens:
Stories in this Series
Stock Screening Basics
You Should be Using Stock Screens
Characteristics of a Good Stock Screen
Don't Let Stock Screens Cloud Your Judgment
Stock Screens for All Investors
Stock Screening Tools You May Want to Consider
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