Finding good stocks to add to your portfolio is never an easy task. With so many companies on the market, there’s a seemingly limitless amount of choice, while the sheer abundance of information available on the internet relating to any stock can be overwhelming too. This is where free stock screeners can come in extremely useful, helping you to zero in on the stocks that fit the profile and strategy you’re looking for, before you turn to the best online stock trading (opens in new tab) platforms to implement your move.
How do stock screeners work?
Stock screeners work by using filters, which will narrow down the stocks most suitable to you based on the various company criteria you feel is important and the outcomes you are hoping to achieve. Typically, stock screeners allow you to filter stocks by revenue, volatility and profit margin, as well as ratios such as debt to equity and price to earnings. A screener can also usually be used to search for stocks within specific industries.
To help you identify precisely the type of stock best suited to your needs, you’ll usually be asked to answer a number of questions. These might include canvassing your preference for large or small cap stocks, finding out whether you’re most interested in stocks that are on the rise or have recently fallen, and asking you about the particular sectors you have your eye on. There will be many more questions besides, but all are designed to eventually provide you with a shortlist of stocks that are suitable for your investment intentions.
Are stock screeners reliable?
While the best stock screeners are undoubtedly a useful way of narrowing down your options, it is probably best to consider the shortlists generated as a good starting point to your decision-making process rather than representing the final word. Use the condensed list as the basis from which to undertake your own research into each stock.
Is there any economic or company specific news that a stock screener by its nature cannot take into account? And you might want to check how up to date and comparable the figures used by a screener are too - if the databases behind a screener are operating to different schedules, there may be new figures available that should be factored into any decision you make.
What are the stock screening options?
If you want a stock screener with all the latest technology and features, then it is likely you will need to pay for the privilege. But while there are standalone paid-for stock screening services, also consider that the best online stock trading services will offer stock screeners within their platforms to help you sort through the stocks available.
If you’ve not yet signed up to an online stock trading platform, and instead simply want to do some preliminary stock research ahead of deciding whether investing is for you, then there are free stock screeners widely available too. A wealth of information and data is available from these free stock screening sources, allowing you to start planning your strategy for making money without having to spend any. To get you started, we’ve highlighted a few of the best free stock screeners below:
Yahoo! Finance (opens in new tab) is a great place to start your investment research. The finance home page has detailed information about the stock market, including market news and live updates of movements on the major indices, as well as the price of gold and oil, and more besides.
Once you're up to date with the latest market news, there are a number of ready made stock screeners that focus on everything from undervalued growth stocks to high yield bonds. You can, of course, create your own too, narrowing your stock search by sector and index membership, and furthermore by inputting exact share data, including minimum and maximum prices and dividend percentages. You can also filter sales, valuation ratios and growth estimates. In addition to the stock screener, Yahoo! Finance includes a bond and fund screener.
Finviz (opens in new tab) is full of investing information about the current day's most popular stocks. As well as up-to-the minute reports on the Dow, Nasdaq and the S&P 500, popular stocks are listed with their last posted value, percentage of change and their signal, indicating whether they are a top gainer or loser, oversold, or highly volatile.
The stock screener itself is relatively straightforward. Stocks are listed alphabetically, but headed up by a wide choice of filters split into three main categories: Descriptive, Fundamental and Technical. Choose “All” and every filter on offer will appear at once. A guided tour video explains how to use the stock screener effectively and to your advantage, and is a must-watch if you want to make the most of all the options this in-depth screener provides. For anyone with the appropriate knowledge to use these tools, Finviz is a powerful option.
If you’re relatively new to investing or feel overwhelmed by other stock screeners, MarketWatch (opens in new tab) is a good place to start. A well organized and easy to navigate platform, MarketWatch allows you to filter investment opportunities with just a few parameters if you so wish, or many more.
The various sections are clearly distinguishable, and have been honed down to overarching categories of price, volume, fundamentals, technical, and exchange and industry. As you would expect, market news is on offer too, along with the latest stock index data, making MarketWatch one of the best free stock screening destinations for if you want a user friendly platform.
The free stock screener from CNBC (opens in new tab) has the advantage of offering a number of predefined screens for investors wanting to focus on a number of scenarios. At a headline level there are ready made shortlistings for steady performers, high dividend yielding companies, small cap value stocks and large cap growth. The option to create a custom screen is also available, with criteria separated in the first instance into nine different categories, including analyst estimates, growth trends, performance and management efficiency. Within each category, you'll find filters for further narrowing your search too. The platform is a little low-key compared to some others, but the option to save your custom screen is a nice touch that means you can quickly return to your area of focus whenever you want.
Zacks (opens in new tab) effectively offers two stock screeners - there is a free version where you filter stock opportunities based on a 52-week high, market caps, dividend yields, average volume and so on, and the paid version, which if you upgrade to can provide information such as Zacks Rank, which rates stocks in terms of their expected performance going forward. While these extras might prove useful, the free stock screener offers plenty of functionality to narrow in on the criteria most important for selecting your next investment.
Like other free stock screeners, Zacks provides basic predefined screens and articles about investing. However, it also offers a free test that evaluates your custom screens to see how profitable they might be. While this is a step up from some of the run-of-the-mill stock screening options, remember that there are no guarantees that such predictions and pointers will make you more money!
Taking the next investment step
Stock screeners are a great resource when it comes to searching for the right investments for you. What can seem like a bewildering array of stock choice can be quickly cut down to a more manageable size within the space of a few clicks, providing you with a base from which to embark on more personal and detailed research.
If you have investments already, it is likely you’ll have some form of broker already through which you can put your plans into action. For novice investors who feel they are now ready to take the plunge, however, the next step will likely involve signing up to one of the best online stock trading (opens in new tab) platforms to get yourself started.
It may sound simple, and in many respects it is, but always remember that investing is a serious business, and that your money will be at risk. While all your research might point towards a stock that is destined for the top, there are no guaranteed winners when it comes to investments. That said, if you’re comfortable with the risk and happy to ride out the short-term fluctuations in values, leaving your money invested for the long term can offer excellent returns that are far in excess of anything that the best online banks (opens in new tab) offer on savings accounts. Monitoring your investments is also key, with the best personal finance software (opens in new tab) the ideal way to keep tabs on all of your finances, as well as your investments.