Stock Screener Review – Finding Stocks Using Stock Screening.

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So far we have discussed what is important in finding great stocks and how important it is to let the numbers speak for themselves. I also showed you the principles of EPS (Earnings Per Share) and EPS% increases.

However, I have not shown you how to find the actual stocks that could form your base list of stocks to review in detail.
Here is the process I use to find winning stocks.

  1. Understand what you are looking for. (Fundamentals – EPS% Acceleration)
  2. Use your selection criteria to narrow down the 7200 stocks on the US Stock Markets. (Stock Screening)
  3. From your Screened List, you can then review in detail further fundamentals.
  4. Learn a little about the industry of the stocks you are interested in.
  5. Analyse the Stock Pattern, to assess when to BUY “Charting”
  6. Work out your Entry and Exit Strategy

So, this section is explicitly about filtering out the junk to find the Gems.

This is known in the industry, as Screening for Stocks. Essentially filtering out stock based on criteria.The problem at the moment is there are many Stock Screeners on the web today but many of them want you to pay, or many of them do not allow you to select the relevant criteria. Preferring to give you options to select many indicators excluding EPS% increases.

I reviewed the following stock screeners and found them all to be lacking the relevant criteria for us to be able to find the stocks we want to see.

AOL, Google Finance, Yahoo Finance, ZACKS, Morningstar. Some offered Premium Upgrades so you pay for the screener service.

But luckily we do not need to do this. I found one that in my opinion checked all the boxes and would be really worth using.  NASDAQ Stock Screener.

(Click to enlarge)

Although the NASDAQ exchange provides this screener, the screener can be used on all US Exchanges, which is an absolute must.
The Criteria I used to filter the stocks to potential Winner are listed here.

  1. Close Price >= $4 – this is the Share Price of the Stock at last market close. Use this to filter out Penny Stocks, there is a reason share price of a stock can be so small, and it is not usually a good reason, stock decline in price, because the companies behind the stock are usually run poorly, or are money little if any money.
  2. Market Capitalization >= $200 Million. This is the worth of all the outstanding stocks added together. Essentially the worth of the company. You could use a figure of $100 Million, of $50 Million if you wish, this depends on what you personally think constitutes a stable business size. Although the phrase coined recently is “too big to fail”, which sends shivers of paranoia through the private investor.
  3. EPS % Change Last Quarter >= 30% This is the % increase of the EPS for the last three months. I set this a 30%, to show us stocks performing strongly.
  4. EPS % Growth 1 Year >= 50%. Combined with the previous criteria, this helps us separate the men for the boys. This means over the last year the earning have increase over 50%. Never a bad thing.
  5. Projected EPS Change Current Quarter >= 30%. This means the companies estimated Earnings for this quarter. In the current climate you could drop this to 20% if you wish, as demand is contracting a lot, so 20% would still be healthy.

This is not an endorsement to buy these stocks this is a listing of stocks with good fundamentals, at the time of publishing.

20 COMMENTS

  1. Mostly this screen looks for EPS growth.
    Whats your thought on also looking for ROI,Sales growth , cash growth ?

  2. ROI I do not scan for, however P/E, Revenue Growth, Long Term Debt to equity ratio and volume surge are all good measures. In the book I included detailed scans for searching for different types of Stock, such as fast growth companies, cyclicals, recoveries and stalwarts, in also includes lesson on how to compare companies in the same industry. Over time I will release some of these lessons to the website.

    thanks for asking.

  3. barry, a good stock screener that i use which is free that you might want to take a look at and maybe recommend is at finviz.com it gives you everything you could want for selections. it even lets you pick technical options candlestick patterns such as a doji. i think you would like it

  4. Hi Philip, I just checked out finviz.com, you are right it looks really good, and it is very fast. Will check it out in more detail in a future session on stock screening. Thanks for the tip.

  5. What philip says is correct…finviz is the best free stocks sceener.. i wish that it covers the Asia markets. Indonesia is a hot market right now. It has already overtaken China and growing fast,really fast.

  6. Nice posts looking to make a screener for my Tradestation software chatrs. Where is your book I want it also?

    Thanks
    Darren

  7. It’s really a cool and helpful piece of information. I am happy that you simply shared this useful info with us. Please keep us informed like this. Thanks for sharing.

  8. Thanks Barry for sharing, it is very helpful.. also Philip thank you for sharing finbiz.com..

    Barry do you have a video where you go over the screen parameters you discussed here? i am new to investing stocks & seems like screening is a very crutial part of selecting a profitable stock. so any other video/class on screening if you have, can you please share? thanks 🙂
    AC

  9. Thanks Barry..
    I am planning on buying the pro version.. however since i am new to the stock market, i want to first complete the free classes, have some basic understanding of the stock market & then start with the pro classes.

    Another question on back to the screener- do use same set of parameters to screen short term stocks (like few weeks) & long term stocks which you wish to hold for atleast a year? If not what different parameters you use? Thanks in advance 🙂

    AC

  10. Hi Arunav

    my suggestion would be go for the PRO training now, because it includes the basic training on the free course and will fast track you into the knowledge you need. To answer your question you should let the stock price tell you when to exit a stock and when to hold it. The most profitable period to hold a stock is 45 days according to my testing, however a stock might surge for a week then pull back. You need to set your price target in advance and stick to the plan. That might be 2 weeks, that might be 3 months. The pro training teaches a master exit strategy called the escalator method.

  11. It’s nearly impossible to find educated people in this particular topic, however, you sound like
    you know what you’re talking about! Thanks

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