Last Updated on Dec 14, 2021 by Aradhana Gotur
Picking the right stocks from a large database is not an easy task. It is time-consuming and stressful. That’s where a stock screener comes in handy. In this article, let us look at the benefits of a stock screener and how Tickertape’s screener can help you make better and quicker investment decisions.
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Table of Contents
Benefits of using a stock screener
Listed are 5 ways in which a screener can benefit you.
A stock screener saves time
Thousands of stocks are listed on bourses, which makes screening a handful of them tedious. Studying the financials of each stock thoroughly, evaluating its historical performance and future prospects, and analyzing the impact of current events and news on the scrip would take forever.
Thanks to the screener, this lengthy process of evaluating stocks is narrowed down to simply applying a couple of metrics that complement your investment objective. Once you select the metrics you want to apply, the screener filters out stocks that don’t meet your requirements. The result? You are only left with a list of stocks that fit your criteria.
For instance, if you are looking for stocks that are heavily funded with equity as opposed to debt, you can apply the debt-to-equity ratio. If you are looking for undervalued stocks, applying a low level of price-to-earnings ratio (P/E) makes sense. Similarly, if you are interested in stocks that have a comfortable short-term liquidity position, you can set a high current ratio as one of the metrics.
A stock screener eliminates emotional-biased decisions
When evaluating stocks, it is easy to steer away from our objective and make decisions based on emotions instead. Rarely are such illogical decisions fruitful, which ultimately impact your returns on investment.
For instance, investing or staying invested in a stock simply because you like their product doesn’t make sense if the company has unattractive prospects. Fortunately, a stock screener eliminates such biases and illogical decisions and filters out stocks based on logical parameters.
A stock screener presents new investment opportunities
Since a stock screener filters out scrips that meet your criteria from a large database, it presents certain opportunities that you may not have considered or were not aware of in the first place. Meaning, you may discover unpopular stocks, which may have the potential to grow but are often overlooked.
A stock screener allows you to save screens
Some screeners like that of Tickertape, allow you to save a particular screen for future reference. This way, you can quickly load a saved screener when evaluating stocks and accelerate the screening process based on metrics and filters that you use often.
A stock screener updates current information
Most screeners update current events and information regarding stocks regularly. For instance, Tickertape displays live price movements of stocks to help you analyse its performance better. It also provides regular updates on annual and quarterly financials, and corporate actions, which are crucial to investing in stocks and their performance.
How to use Tickertape to screen stocks?
Now that you know the benefits of using a stock screener when evaluating your options, let us look at how to use Tickertape’s screener.
1. Launch Tickertape’s screener. By default, the screener loads “New Screen” that returns stocks based on a set of filters. Note that you can either retain these default filters or remove them
2. Then, determine the metrics and filters based on which you want to screen stocks. You may start with the sector, market capitalization, P/E, and so on. You may further screen stocks based on over 70 filters of categories including Financials, Valuation, Growth, and so on
3. Do this by clicking the “Add Filter Button” at the bottom of the “Filter Panel” on the left-hand side of the screen. What’s more, Tickertape also allows you to create a custom filter by using the “Custom” option
Once the screener filters stocks that meet your criteria, evaluate them further. You may want to do fundamental analysis and detailed market research before investing in stocks. Tickertape also allows you to save this screen for future reference. Click the “Save” button on top of the Filter Panel. Give your screen a suitable name and description. You can access all your Saved Screens under the “All Screens” tab below the moving ticker tape.
But screening stocks alone doesn’t guarantee returns. Screening is just the first step to narrow down stocks that may interest you. To ensure that the stocks are worth a long-term investment, you need to evaluate them individually. That’s why Tickertape equips you with meaningful information on the stock’s overview, financials, peers, price forecast, and news and events. Such information equips you to make better investment decisions.
Next, we shall learn more about other features of Tickertape. Until then, try out this feature and let us know your thoughts!