Stock Screener
A stock screener is a set of tools that allow investors to quickly sort through the myriad of available stocks and increasing exchange-traded funds according to the investor’s own criteria. Stock screeners are most typically available on brokerage trading platforms (usually free), but there are also some independent subscription-based stock screeners available. Stock screeners allow investors to employ their own methodology about what makes a stock or ETF valuable (longer-term traders) or spot a potential trading opportunity (shorter-term traders).
Stock Screener
Definition
A stock screener is a tool that allows investors to quickly filter through numerous available stocks and exchange-traded funds (ETFs) based on their own criteria. These tools are typically offered for free on brokerage platforms, but there are also standalone subscription-based stock screeners available. Stock screeners help investors apply their own methodologies to determine the value of stocks or ETFs (suitable for long-term traders) or to discover potential trading opportunities (suitable for short-term traders).
Origin
The concept of stock screeners originated in the late 20th century as the internet and computer technology developed. Investors began seeking more efficient ways to filter and analyze stocks. The earliest stock screeners were simple database query tools, but as technology advanced, these tools evolved into powerful online platforms capable of providing real-time market data and complex screening criteria.
Categories and Features
Stock screeners can be categorized based on different criteria:
- Fundamental Screeners: Based on a company's financial data, such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, earnings growth rate, etc.
- Technical Screeners: Based on stock price and volume data, such as moving averages, relative strength index (RSI), Bollinger Bands, etc.
- Hybrid Screeners: Combine both fundamental and technical screening criteria to provide a more comprehensive analysis.
Each type of screener has its unique application scenarios and pros and cons. For example, fundamental screeners are suitable for long-term investors, while technical screeners are more suitable for short-term traders.
Specific Cases
Case 1: A long-term investor wants to find stocks with a P/E ratio below 15 and an earnings growth rate above 10%. They can use a fundamental screener to input these criteria and quickly filter out stocks that meet the standards, saving a lot of time and effort.
Case 2: A short-term trader wants to find stocks that have recently seen a significant increase in trading volume and have broken above the 50-day moving average. They can use a technical screener to set these conditions and find potential trading opportunities.
Common Questions
Q: Are stock screeners always accurate?
A: Stock screeners provide data and screening results based on set criteria and market data, but they cannot guarantee the accuracy and future performance of the results. Investors should combine other analysis methods and market research when making decisions.
Q: Do I need to pay to use a stock screener?
A: Many brokerage platforms offer free stock screeners, but some advanced features or standalone subscription-based stock screeners may require a fee.
