How to use online stock screeners

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Do you depend on your friends for suggestions or advice on picking stocks for your portfolio? Well, it’s good to have such friends but it is very important that you do the due diligence yourself to make sure you are selecting the right ones from the lot. Stock screeners help you narrow down on a few select stocks based on specific criteria. Platforms such as Screener.in, Tickertape, Yahoo Finance, StockEdge and Investing.com help you do this conveniently.

Common screeners

Most of these platforms already have a few templated screeners that you can use for stock selection. These are screeners based on various factors such as popular investment themes, formulas and valuations. A few common screeners that one can find on almost all platforms include growth and value-tap companies, debt-reducing entities, bluechips, high ROCE (return on capital employed) firms, high dividend yield and cash-rich companies.

Before selecting a particular templated screener, one should go through the criteria used for developing it. For example, Screener.in’s ‘value stocks’ screener filters stocks with the following criteria - last year’s EPS (earnings per share) greater than ₹20, debt to equity ratio of less than 0.1, average return on capital employed of greater than 35 per cent in the last five years, market capitalisation of more of ₹500 crore and operating profit margin of greater than 15 per cent in the last five years.

On most platforms, you can also alter the criteria to match your investment strategy. One can further narrow down the filtered stocks based on industry/sector and market cap.

The filtered stocks can be further analysed by clicking on any stock from the list. Almost all the platforms provide the company balance sheet, and profit and loss and cash flow statements, ratios and quarterly results with a historical perspective. In addition to the above details, StockEdge also provides instant details on mutual fund holdings for a particular stock as on a particular date.

Besides editing the existing templates, you can also create your own screener based on your requirements. Some platforms such as StockEdge allow creating a bundled screener with both fundamental and technical metrics.

You can also save the created screener for further use.

Premium plans

The good news is that most of the above mentioned facilities are provided for free by the platforms. However, there are some services which are behind a paywall. The free and premium services differ from one provider to another. For instance, narrowing down filters industry-wise and exporting data come as a free service by Investing.com while it is chargeable by Screener.in. Having said that, Screener.in provides more than 1000 templated screeners which is not the case with the former. Screener.in’s premium plan comes at Rs 4,999 per annum and provides options to add more colums to the screener, in addition to providing material such as detailed notes to accounts and credit rating reports that comes handy during fundamental analysis.

In the same way, while inserting a customised ratio comes under a free plan in Screener.in, it is chargeable under other platforms such as Tickertape. Tickertape’s Pro plan comes at Rs 1,133 per annum which includes offering earnings forecasts, brokerage reports, and metrics such as percentage of analysts recommending buy call on a stock. Meanwhile, StockEdge premium plan comes at Rs 2,999 per year for unlocking higher number of metrics for the screener. It provides inhouse stock reports for some of the stocks. While screeners from Investing.com and Yahoo Finance may come free, the screener options would be limited.

The cost and the services offered by these platforms cannot be compared as facilities provided by each one of them vary.

Points to note

Whether you go for the free service or the paid option, note that not all platforms work alike. For example, a value stocks screener from one platform may not result in the same stocks as that from another as the criteria used could be different across platforms. Thus, understanding the criteria used is essential before using the screener data.

Also, when using a screener across industries, make sure the criteria used is relevant for all sectors. Further, if you would like to save the screeners used for picking stocks, go for platforms that allow you to export the data. Screener.in and Investing.com are two such platforms.

Finally, make sure you opt for ‘latest data’ while selecting a screener. This will pull out data only for those stocks for which the latest data is available..

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