How to Use a Stock Screener

A stock screener is a tool that is used to help individuals find stocks that fit their investment criteria. It is a way to filter through all of the thousands of stocks that are available. Stock screeners are offered by many different financial publications. You can visit these publications on their website and gain immediate access to a stock screener. In many cases, when you work with a stock broker, they will also provide access to a stock screener.

Purpose

The purpose of this device is to help you save a great deal of time. When you are trying to find new stocks, it can be very difficult to find any that match the criteria that you set forth as an investor. There are thousands of stocks; most of them will not be what you are looking for. The stock screener is used to filter through the many stocks and find the one that will meet your needs.

Types of Stocks

When you begin the process of looking at a stock screener, you can choose a specific type of stock. For example, you could look at only growth stocks, or stocks that are considered to be value stocks. You can also search for dividend stocks or you can zero in on stocks from a particular sector, such as the health care sector or the energy sector. There will usually be a category that allows you to choose the available stock types that you want to look at.

Financial Metrics

Once you have chosen a category of stocks to look at, there are a number of financial metrics that you can use to narrow your search down even further. You can look at the available financial metrics that your stock screener allows you to choose from. This allows you to look at stocks that have a certain price-earnings ratio, have good profit margins, have a low debt to equity ratio or fit several other criteria.

These valuation multiples are commonly used by stock analysts as a way to identify companies that are poised for capital appreciation. With the help of a stock screener, you can easily look at these metrics for every company that is included in the list. Once you pull up the information that you want, most stock screeners will allow you to see the companies listed by rank, according to the criteria that you set. 

Technical Analysis

Most traders like to utilize a little bit of technical analysis to help make the final decision. The stock screener can help you identify a few stocks to look at, and then by looking at a price chart, you can decide when to get involved with one. You can look at the chart and see if the stock appears to be moving up or down. Technical Analysis will help you narrow down your choices so that you know whether or not you want to get involved with the stock.

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