Ultimate Guide to Stock Screeners: Filters, Examples, Strategies & FAQs
Published by: cmaknowledge.in
Introduction to Stock Screeners
Stock screeners are powerful tools used by investors to identify suitable investment opportunities from thousands of publicly listed companies. They allow users to filter stocks based on various financial and non-financial criteria like profitability, valuation, growth, and volume. The objective is to shortlist stocks that align with the investor’s strategy, risk appetite, and goals.
Screeners simplify complex stock analysis. Instead of analyzing hundreds of stocks manually, you can quickly filter companies with high Return on Equity (ROE), low debt, or strong earnings growth. This saves time and reduces the risk of missing quality stocks.
Types of Filters in Stock Screeners
Stock screeners offer various filter categories to refine your search. Let’s look at each in detail:
1. Profitability Filters
These help assess a company’s ability to generate profits from its operations. Key profitability metrics include:
- Net Profit Margin – % of revenue remaining after all expenses.
- Return on Equity (ROE) – Profitability relative to shareholder capital.
- Return on Assets (ROA) – Earnings as a % of total assets.
| Company | Net Profit Margin | ROE | ROA |
|---|---|---|---|
| Infosys | 18% | 28% | 22% |
| HUL | 20% | 75% | 35% |
2. Financial Ratios
These ratios reveal a company’s liquidity and financial stability. Important ones include:
- Current Ratio – Ability to pay short-term liabilities.
- Quick Ratio – Stricter liquidity measure (excludes inventory).
- Debt-to-Equity Ratio – Financial leverage used by the company.
3. Growth Filters
Growth-focused investors prefer companies with increasing sales and profits. Useful filters:
- Revenue Growth – Year-on-year growth in top-line.
- EPS Growth – Growth in net earnings per share.
- 5-Year CAGR – Compounded annual growth rate over 5 years.
4. Valuation Filters
Helps determine if a stock is overvalued or undervalued. Common metrics include:
- P/E Ratio – Price per share divided by earnings per share.
- P/B Ratio – Market price divided by book value.
- P/S Ratio – Valuation relative to sales.
5. Price and Volume Filters
Used to analyze liquidity and trading activity:
- Average Volume – Average daily traded volume.
- Price Change % – Daily or weekly percentage price changes.
- Volatility – Indicates risk and price movement range.
6. Technical Indicators
Used mainly by traders to find entry/exit points:
- RSI – Detect overbought/oversold conditions.
- MACD – Trend following indicator using moving averages.
- Moving Averages – SMA, EMA etc. for price trend analysis.
7. Ownership Patterns
Understanding who owns the stock is vital. Filters include:
- Promoter Holding – High holding reflects confidence.
- Institutional Holding – Mutual funds, FIIs ownership trends.
8. Derivatives (F&O) Data
Applicable to traders who rely on futures and options data:
- Open Interest – Indicates liquidity in derivatives.
- Long/Short Buildup – Directional bets in the market.
How to Use Screeners Effectively
- Set objectives: growth, value, momentum, etc.
- Choose relevant filters based on your style.
- Start with broad filters then refine further.
- Shortlist stocks and analyze annual reports.
- Check consistency, news, and sector trends.
Popular Stock Screeners in India
| Platform | Features | Pricing |
|---|---|---|
| Screener.in | Fundamental filters, ratios, formulas | Free |
| Tickertape | Screeners, MF data, market mood index | Free + Paid |
| TradingView | Technical screeners, charts | Free + Paid |
| Trendlyne | F&O scans, fund analysis | Paid |
FAQs on Stock Screeners
Q1: Are stock screeners suitable for beginners?
Yes, screeners like Screener.in and Tickertape are easy to use and have beginner-friendly dashboards.
Q2: Do I need paid tools for screening?
No, free tools are enough for most long-term investors. Paid tools offer more data and customization.
Q3: Can screeners guarantee profit?
No. They help shortlist stocks, but investors must analyze the company fundamentals and industry before investing.
Q4: How often should I use screeners?
Use them weekly or monthly to track portfolio health and discover new ideas.
Q5: Which is the best free screener in India?
Screener.in is widely considered the best free tool for fundamental analysis in India.
Conclusion
Stock screeners are indispensable tools in modern investing. They streamline the process of analyzing thousands of companies by applying filters that match your strategy. Whether you’re a value investor, a growth seeker, or a short-term trader, screeners can significantly enhance decision-making and reduce research time.
However, they should not replace detailed fundamental analysis. Use them to create a shortlist, then verify the company’s management, sector potential, risk factors, and market trends before investing.
By understanding and utilizing filters like profitability, growth, valuation, ownership, and volume, investors can make more informed decisions and build a robust portfolio over time.