Most investors in search for value (buy low sell high approach to investing) run screens to quickly separate the wheat from the chaff.
Screens are search queries that enable you to search thousands of companies based on profit, debt, capital allocation and effective management to find companies with wonderful asset values that are outstandingly managed. This process helps investors to immediately isolate well-run enterprise for a more intense analysis of prospective securities to invest in.
These screens give a picture of the kind of management that governs the company’s affairs. For instance, a company with a higher gross margin (sales – cost of goods sold) than its competition is very likely one with ingenious management that found efficient ways to reduce cost, demonstrates outstanding supply management skills and implements stringent safety measures (reduces insurance cost and product defects).
Screens are essential tools to enable you to quickly get an idea of the company’s performance versus its peers. Screens, however, should not be used as the ultimate answer to stock picking.
The Christian investor is advised to “look well into the matter” (Proverbs 10:4), to look deep into the interior by searching SEC documents for clues of a sound underlying business. Here are couple of stock screens that I use quite frequently:
Yahoo Stock Screen
Yahoo stock screen is an older version, but reliable. I use it on a spasmodic basis to run screens for securities using a limited number of criteria. If you are looking to isolate foreign companies from your search this option is not available.
FinFiz Stock Screen
FinFiz stock screen is one of the best I have used, with scores of options, including screening stocks by country of domicile. The website provides options beyond the mundane P/E ratios to include important fundamental matrices such as Price / Free cash flow, return on assets, return on investments and dozens of others.