Stock Screening and Selection
A systematic screening process helps you find quality stocks consistently.
What is Stock Screening?
- Filtering thousands of stocks by criteria
- Systematic approach to finding opportunities
- Removes emotional stock picking
- Based on fundamental or technical criteria
Fundamental Screens
Growth Stock Screen
- Revenue growth > 15% annually
- Earnings growth > 20% annually
- ROE > 15%
- Debt/Equity < 1.0
- Insider ownership > 5%
Value Stock Screen
- P/E below industry average
- P/B below 2.0
- Dividend yield > 2%
- Positive free cash flow
- Low debt levels
Quality Screen
- Profit margin above industry average
- Consistent earnings growth 5+ years
- Strong balance sheet
- High ROIC (Return on Invested Capital)
- Growing dividends
Technical Screens
Momentum Screen
- Price above 50 and 200 day MA
- RSI between 50-70
- New 52-week high
- Increasing volume
Breakout Screen
- Tight consolidation pattern
- Volume contracting
- Near resistance level
- Relative strength improving
Popular Screening Tools
- Finviz (free, powerful)
- TradingView screener
- Yahoo Finance screener
- Seeking Alpha
Building a Watch List
Process
- Run screens weekly
- Verify with manual analysis
- Add to categorized watch list
- Monitor for entry signals
- Maximum 20-30 stocks on active list
Key Takeaways
- Screen systematically, not randomly
- Combine fundamental and technical
- Keep criteria consistent
- Update watch list weekly
- Quality over quantity in selection