Stock screener parameters help investors find stocks that match specific criteria. These filters save time by narrowing down thousands of stocks to a focused list of potential investments. Understanding these parameters will improve your investment research process.
Basic Stock Screener Parameters
Price is the most common stock screener parameter. You can search for stocks within specific price ranges, such as under $10 for penny stocks or above $100 for higher-priced companies. Price filters help investors find stocks that fit their budget and investment strategy.
Market capitalization measures a company’s size by multiplying share price by outstanding shares. Stock screeners typically offer options like large-cap (over $10 billion), mid-cap ($2-10 billion), and small-cap (under $2 billion). Company size often indicates stability, growth potential, and risk level.
Volume shows how many shares trade daily. High volume stocks have more liquidity, making them easier to buy and sell without affecting price. Low volume stocks may have wider spreads between buy and sell prices. Many investors set minimum volume thresholds to ensure they can exit positions easily.
Beta measures a stock’s price volatility compared to the market. A beta of 1.0 means the stock moves with the market. Values above 1.0 indicate higher volatility, while values below 1.0 suggest lower volatility. Risk-averse investors often screen for low beta stocks, while those seeking higher returns might look for high beta options.
Fundamental Analysis Parameters
The price-to-earnings (P/E) ratio divides share price by earnings per share. This ratio shows how much investors pay for each dollar of company earnings. A high P/E may indicate an overvalued stock or high growth expectations. A low P/E might suggest an undervalued stock or concerns about future performance.
Earnings per share (EPS) represents a company’s profit divided by outstanding shares. Growing EPS typically signals improving company performance. Stock screeners let you filter by current EPS, EPS growth rates, and projected future EPS. Many successful investors focus on consistent EPS growth over time.
Dividend yield calculates annual dividend payments as a percentage of share price. Income-focused investors often search for stocks with yields above market averages. Stock screeners can filter by current yield, dividend growth rate, and payout history. Companies with long histories of dividend increases often attract income-seeking investors.
Price-to-book (P/B) ratio compares share price to book value per share. Book value represents a company’s assets minus liabilities. A P/B ratio below 1.0 might indicate an undervalued company, though it could also signal financial problems. Value investors frequently use P/B ratios in their screening process.
Return on equity (ROE) measures profitability by dividing net income by shareholder equity. Higher ROE percentages show more efficient use of capital. Many investors screen for companies with ROE above industry averages or with improving ROE trends. This metric helps identify well-managed companies.
Debt-to-equity ratio shows a company’s financial leverage by dividing total debt by shareholder equity. Lower ratios indicate stronger financial positions. During economic uncertainty, investors often screen for companies with low debt levels. This parameter helps identify financially stable investment options.
Technical Analysis Parameters
Moving averages track price trends over specific time periods. Stock screeners can find stocks trading above or below their 50-day, 100-day, or 200-day moving averages. Crossing above a moving average often signals upward momentum, while dropping below may indicate downward pressure.
Relative Strength Index (RSI) measures price momentum on a scale from 0 to 100. Readings above 70 suggest a stock may be overbought, while readings below 30 indicate possible oversold conditions. Technical traders screen for stocks with specific RSI values to identify potential reversal points.
Moving Average Convergence Divergence (MACD) shows momentum by comparing two moving averages. Stock screeners can identify stocks with MACD crossovers, which signal potential trend changes. The MACD histogram displays the difference between these lines, with growing bars suggesting increasing momentum.
Support and resistance levels mark price points where stocks repeatedly reverse direction. Some advanced screeners can identify stocks trading near these key levels. These parameters help traders find entry and exit points with favorable risk-reward ratios.
Industry and Sector Parameters
Sector and industry filters group stocks by business type. Examples include technology, healthcare, financial services, and consumer goods. These filters help investors target areas with strong growth potential or avoid underperforming sectors.
Geographic filters sort stocks by company headquarters location or primary market region. These parameters help investors focus on specific countries or regions based on economic outlook. Some screeners also identify global exposure percentages for multinational companies.
Index membership filters show stocks belonging to major indices like the S&P 500, Dow Jones, or Russell 2000. These filters help investors align portfolios with benchmark indices or find stocks with specific market representation.
Custom and Advanced Parameters
Growth rate parameters measure percentage changes in key metrics like revenue, earnings, and cash flow. Investors can screen for companies with consistent growth above specific thresholds. Growth investors typically search for companies with strong revenue and earnings expansion.
Insider trading filters show recent purchases or sales by company executives and board members. Significant insider buying often signals confidence in future performance. Some investors view insider transactions as important indicators of a company’s prospects.
Analyst ratings and price targets reflect professional opinions on stocks. Screeners can filter by average ratings, recent upgrades or downgrades, and price target percentages above current levels. These parameters provide external perspectives on investment opportunities.
Short interest shows the percentage of a company’s shares sold short by investors expecting price declines. High short interest may indicate negative sentiment but could also set up a “short squeeze” if prices rise. Some contrarian investors screen for stocks with high short interest as potential opportunities.
Valuation change filters identify stocks with recent significant changes in key metrics. Examples include P/E expansion or compression, dividend yield increases, or sudden changes in analyst coverage. These parameters help investors spot developing trends or changing market perceptions.
Options activity parameters review trading volumes and open interest in a stock’s options. Unusual options activity may signal institutional interest or anticipated news. Some advanced screeners include these metrics for investors who incorporate options data in their analysis.
Combining Parameters Effectively
Parameter combinations create more targeted stock screens. Starting with broader filters and adding specific criteria helps narrow results efficiently. Most successful investors use multiple parameters to find stocks meeting all their requirements.
Screening strategies should match your investment goals. Value investors might prioritize P/E ratios and dividend yields, while growth investors focus on revenue expansion and earnings growth. Technical traders often emphasize price patterns and momentum indicators in their screens.
Adjustable thresholds help fine-tune screening results. If your search returns too many stocks, tighten your criteria. If too few appear, loosen some parameters. Finding the right balance produces manageable lists of potential investments.
Back-testing screener results against historical data helps validate your parameter selections. This process shows how stocks meeting your criteria performed in the past. While past performance doesn’t guarantee future results, testing helps refine your screening approach.
Regular screening schedule implementation improves investment research. Some investors run screens weekly or monthly to find new opportunities. Consistent screening helps identify emerging trends and maintains focus on your investment strategy.