How to Use Advanced Stock Screeners: A Trader’s Guide
There are about 3,500 companies listed on stock exchanges in the United States. Picking the right stock can feel a lot like finding a needle in a haystack. Stock screeners are tools that help you filter through the world's stocks to find the ones that best match your investment criteria.
Basic stock screeners look at some key metrics that typical investors care about. Advanced stock screeners take things a step further and give you more granular control when hunting for your next winning stock. When getting ready to dive in for the first time, you'll want to know the basics to get the best results for your search.
What Is an Advanced Stock Screener?
A stock screener is a tool that helps you sift through a large number of public companies to find the stock that fits your criteria. Screeners have a range of features. Your brokerage likely has its own stock screener, as well as screeners for other types of investments.
Basic stock screener criteria cover the most common metrics. You can quickly create a list of stocks by market cap, P/E ratio, gain or loss in a specific time period, share volume traded and a whole lot more. The free stock screener at Yahoo! Finance features these, among many filter choices:
But what makes a stock screener an advanced stock screener? There is no official definition. But some screeners have different features that are more advanced. Those could be more highly technical filters and fields. And some screeners even let you use calculated fields that you create yourself.
Advanced Stock Screener Fields
If you want to get your hands dirty with a more advanced screener, check out the stock screener at finviz. This screener has fields that use formulas and criteria you might have never even heard of!
There are many fields you could consider advanced. For example, in the screenshot above we don't see just P/E ratio. We also see forward P/E based on projections, PEG (P/E growth), earnings per share growth by year, sales growth by period, and so on. And that's just the fundamentals screen!
Active traders may also want to zero in on technical indicators like moving averages, Beta, volatility and performance measures. Here's an expanded look at the filters at finviz:
Most of this is free to use, but finviz and other premium stock analysis tools have paid plans as well. If you can put one of these screeners to good use and pick profitable investments, you should come out ahead in the long run.
Create Your Own Filters
Using Microsoft Excel or custom stock screener tools, you can create your own filters and criteria. Maybe you think book value per share is too common a metric and not focused enough for you. So you come up with a new calculation based on assets, liabilities and income growth over time.
You might even call this the Price/Book/Growth ratio, something that doesn't exist anywhere else. Basic stock screeners won't allow you to find the results. But building your own in Excel or using a screener's existing features, you can make a list of stocks completely unique to your investment theory.
As an example, the stock screener at Equities Lab can take a wide range of inputs and run them through any formulas you choose.
Advanced and expert traders can do very well with this type of setup. However, beginners may find themselves in over their heads with numbers spinning around that doesn't make much sense. If you are new to investing or the markets, start with what you understand and build up to more complex strategies over time.
You Can Find That Needle in the Haystack
If you have the right tools in hand, sorting through all that hay doesn't have to be hard. And the same is true with your investments. Use the right tools, and your new favorite stock doesn't have to be elusive.
You don't have to pay for a stock screener, but in some cases, professional-level screeners are worth the cost. Give it a try and see how advanced screening can level up your investment results.