Stock Screening


Stock screening is specifying specific criteria that you wish a
prospective stock to possess, such as a price to earnings ratio of 15 or below. Once you have specified these characteristics, the computer will return to you a list of stocks which satisfy your request. You will still need to do further analysis to narrow down the list to the one(s) you wish to purchase for your portfolio.


This page will provide the "highlights" of some excellent on-line stock screening resources that are available free. These sites can be used to identify and locate stocks that meet the pre-defined criteria you insert. Using these resources will enable you to locate small capitalization companies that are growing quickly, have low debt, and have low P/E ratios. In other words you are screening companies into a manageable list that you might want to research using a Stock Selection Guide (SSG) for possible purchase. They can also be used to locate the competitors of a company that you are researching.

The page can be defined as a "mini-tutorial" for selected stock screening sites.


Rapid Research

Rapid Research's Advanced search is much like the Basic search in that your first step is to decide which criteria you want to use in evaluating stocks. When you skip a category, all choices within the category will be automatically selected, as in the Basic search. What's nice about the Advanced Search is your choice in each investment category is unlimited. You enter your own upper and/or lower boundaries for the category- up to 27 separate categories and your choice of stock exchanges and industry groups.

For example, let's say you're looking for companies (in any industry) with minimum five-year earnings per share growth and five-year sales growth of 10% annually and whose stock currently sells at a maximum 15 times earnings, 1.5 times book value, and 1.0 times sales.

Within the Ratios section, you will first find the Price-to-Earnings category. Click within the box in the "At Most" column in the Price-to-Earnings category, and enter 15. In other words, you are not interested in stocks whose P/E ratio is greater than 15 but you are also not interested in any minimum P/E value for the purposes of this search. Next, click within the box in the "At Most" column in the Price-to-Book Value category, and enter 1.5. Then, click within the "At Most" box in the Price-to-Revenues category,and enter 1. Since you are not selecting any minimums for these categories, you may leave these boxes blank

Within the Growth Rates section, click within the box in the "At Least" column in the 5-Year EPS Growth category, and enter 10. Then, click within the box in the "At Least" column in the 5-Year Revenue Growth category, and also enter 10. Finally, click the
Search button.

This search returned 40 stocks matching the specific entered criteria. Each Results page contains a maximum of 15 companies; at the bottom of each page, click the appropriate graphic any time you wish to see the next 15 or previous 15 listed stocks. Again, you may rearrange the companies in ascending or descending order according to any of the criteria you have selected.
Click the specific company name for a Comprehensive Company Report.

 

To Help Identify Growth Companies
Possible Screening Criteria


** Note: Often the various screening sites do not make it clear
whether to use decimals or whole numbers for screening criteria
ratios. Most want whole numbers when using % and decimals when
not using %. Example: Earnings/share growth (%) enter 25, for debt/equity
enter 0.35

Sales (revenues) Minimum - at least $400 million
Earnings Per Share (EPS) 5 yr. More Than - 25%
P/E Minimum - 5 Maximum 15
Debt/Equity Maximum - 0.35
Return On Equity (ROE) 5 yr. Minimum - at least 15%

 

Additional Excellent Stock Screening Sites

 

 

Not exactly stock screening sites but these two resources will certainly enrich your investing "tool box." They are supermarket type research and learning sites that are excellent places to start your stock investigation.

InvestorGuide - A particularly helpful site for beginners providing information on the principles of investing, how to choose an investment strategy, answers to 1,000 investing questions. Excellent recommendations and research with two dozen links to research firms, stock upgrades and downgrades. Put this well organized site at the top of your list.

InvestorHome - Everything you could possibly need - 60 links to the leading investment sites. The feature I like best is under Charting Tools - put in your stock or mutual fund symbol and you get a huge set of links to quotes, charts, fundamental research, historical price data, company news, and on and on. When you click on each link it automatically takes you to the specific topic about the symbol you put in. An excellent starting point.