What is a stock screener?
The Stock Screener is a suite of tools that allows investors to quickly screen the myriad of available stocks and grow exchange-traded funds based on the investor’s own criteria. Stock screeners are usually available on broker-dealer platforms (often for free), but there are also some subscription-based standalone stock screeners available. Stock screeners allow investors to use their own methods to determine the value of a stock or ETF (long-term traders) or to identify potential trading opportunities (short-term traders).
- A stock screener is a tool that allows investors and traders to sort through thousands of individual securities to find securities that fit their own approach.
- These tools are generally available for free on most brokerage sites and are also available on some subscription sites.
- Screening tools are useful for fundamental and technical traders, professional and individual investors.
- The stock screener can issue alerts if certain user-defined parameters are met, drawing investors’ attention to key buying and selling opportunities.
- Filters rely on user input to narrow down investment opportunities.
How Stock Screeners Work
Stock screeners allow investors to screen a broad field of potential financial investments using their own criteria. Users start the process by selecting certain investment parameters based on their individual needs.
For example, fundamental investors may be most interested in market capitalization, analyst recommendations, earnings per share (EPS), operating cash flow, multi-year return on investment (ROI), dividend yield, and more. Technical traders will be more interested in moving averages/crossovers, relative strength index (RSI) levels that indicate momentum, average directional index (ADX) readings that indicate strength, and chart patterns.
The more criteria a user adds, the smaller the pool of potential securities to invest in. The bottom line is that stock screeners generally have something for every investor and should be used to see the type of information available before entering a trade or investment.
Stock Screener Example
When you first encounter a stock screener, you may be overwhelmed. There will be dozens of categories to view, both technical and fundamental. So before you dive in, decide which side of the valley you’re on – technical or basic. Consider what you’re looking for, what your priorities are, and the types of financial instruments you might be interested in. Then, you can start exploring what the filter has to offer.
If you focus on the short term, you may be drawn to the many technical tools available: Charts; Alerts; Momentum Research, RSI and more technical research. For example, if you focus on a specific stock or ETF, you can set up alerts for when that specific stock crosses a set price level or its RSI reaches overbought/sold.
If you’re a long-term investor, you’ll find plenty of fundamental data (sometimes called technical data) such as earnings per share, average daily volume, market capitalization, and more. This type of data can help you build your portfolio keeping your long-term interests in the company in mind, not just the latest headlines.