A fundamental stock screener is software that filters stocks based on fundamental criteria. They’re really useful for examining stocks based on various financial metrics and data points that relate to the company’s intrinsic value.
An understanding of fundamental analysis is essential whatever your trading strategy. Most swing traders and day traders don’t need to get too deep into the weeds of fundamental analysis, but we still need to understand it. A little poke around a company’s fundamentals can reveal the differences between a shady stock you shouldn’t hold overnight and a solid stock you’ll keep on your watchlist for a long time.
If you’re an investor, you need to dive deeper. Fundamental stock screeners can help you a lot in your research.
How essential is fundamental analysis — and how can a fundamental stock screener help you with it? Let’s dive in!
Stock Screener and Fundamental Analysis
Here’s a quick refresher about stock screeners: stock screeners are awesome tools that let you sort through thousands of listed and unlisted stocks according to your preferred criteria.
Stock screening is one of the bedrock tactics in any trading strategy. Whether you’re screening to build your watchlist, check out new strategies, or just see what’s moving in the market, a stock screener is a trader’s best friend.
The main connection between stock screeners and fundamental analysis is that screeners can filter stocks based on the company’s fundamentals.
A screener will do the heavy lifting for you. You build a set of criteria, and search the entire market to find stocks that meet them.
What Is Fundamental Analysis?
Fundamental analysis is a way to measure a stock’s intrinsic value and strength by analyzing its underlying metrics. This means you don’t just look at the price. Fundamental analysis takes everything into account — from how the company is doing to current market conditions.
What do you use fundamental analysis for? You do it to learn about the company’s growth prospects. You’ll also learn whether the company’s stock is correctly valued or not. An undervalued stock’s price might eventually rise, while an overvalued stock’s price might eventually drop.
The other method for analyzing stocks is technical analysis. In technical analysis, traders study a stock’s trading volume and historical price movements to get a good feel of how the prices behave. Knowing how prices behave means you can properly react to price movements down the line.
Technical analysis is much more common for day trading and swing trading because it concentrates on short-term movements. But it never hurts to learn fundamental analysis — it’s always good to build your knowledge account.
Key Fundamental Analysis Parameters
So, what data points and indicators should you look at? Here’s what I examine when doing fundamental analysis:
- Sales: No sales means you can’t pay the bills — it’s that simple. You’re trading or investing in a company’s future prospects, so look for a company that has a good amount of sales. This is especially important if you’re holding a stock over a longer timeframe.
- Profit & loss (P&L): Checking the company’s P&L gives you an idea how sales income translates to actual earnings. Be wary when you’re holding stocks for companies bleeding money — they might do a stock offering or just go bankrupt.
- Product or service: Ultimately, it all comes down to what the company is selling. A killer product in the pipeline can signal value that hasn’t yet translated to share price.
- Price/earnings (P/E) ratio: P/E ratio compares how much the company is making with its stock price. A high P/E ratio indicates that the market thinks the stock has a good amount of future upside.
- Employee count and office building: This sounds kinda funny, but I always check the company’s employee count and headquarters. If a publicly-traded company only has a handful of employees and a sketchy office in someone’s house, that tells you something about the company.
Those are the five factors I look to the most when doing fundamental analysis. They’re important for short-term trading as well as longer-term moves.
What Is a Fundamental Stock Screener?
A fundamental stock screener is a screener platform that filters for fundamental metrics. Depending on who they’re made for, some stock screeners may have little to no fundamental analysis capabilities.
Examples of Fundamental Stock Screeners
What is the best stock screener for fundamental analysis? I can’t answer that because everybody has different needs, and there are many options out there.
That said, here are some examples of fundamental stock screening tools I like:
- StocksToTrade — Best Fundamental Screener for Traders
- Zacks Stock Screener — Most Versatile Fundamental Screener
- TC2000 — Best Fundamental Screener for Research
- Seeking Alpha — Best Fundamental Screener for Intermediate and Advanced Investors
- Stock Rover — Best Customizable Fundamental Screener
Different stock scanners cater to different kinds of traders. For instance, Seeking Alpha is better for thorough fundamental analysis thanks to its fundamental charting feature. Meanwhile, StocksToTrade is better for day traders because of its customizability, beautiful charting, and other useful trading tools.
How do I choose the best stock screeners? Check out my post about the best stock screener criteria.
StocksToTrade isn’t overly specialized in fundamental analysis. This killer screener is primarily geared toward technical analysis, which is what day and swing traders should be looking for.
Like the great Brian Shannon says, “Only price pays.” If growth isn’t reflected in the chart, it isn’t really growth.
StocksToTrade was built by stock traders for stock traders. It’s got beautiful charts, trader-built screens, and a great news scanner. Try it yourself — sign up for a 14-day StocksToTrade trial for only $7 now!
Importance of Fundamental Analysis in Trading
Fundamental analysis can help traders “read between the lines” and discover a stock’s deeper value. If you know whether a stock is undervalued, overvalued, or accurately valued, you can better gauge its profit potential.
Essentially, fundamental analysis reveals a stock’s nuts and bolts. It helps you get a better idea of the company’s potential and where it’s likely headed.
Fundamental analysis and technical analysis examine different aspects of a stock’s value. Day traders usually focus more on technical analysis because it examines short-term price fluctuations.
Still, fundamental analysis is an essential trading skill. Knowing multiple ways to research expands your arsenal… and it ensures you won’t get caught overlooking something as “fundamental” as terrible financials!
There’s another way for you to learn how to navigate the markets: the Small Cap Rockets chat room. This is where millionaire traders Matt Monaco and Bryce Tuohey break down their trading plans and watchlists every trading day. Test drive StocksToTrade and Small Cap Rockets for 14 days — just $18!
Why Do You Need a Fundamental Stock Screener?
You need a fundamental stock screener to cover all of your bases. If you’re only scanning for technical criteria, you’re missing out on half of the picture.
Different screener apps cater to different needs. Check out my list of the best screeners for swing trading and day trading. For beginners looking to get their feet wet, read my list of the best free stock screeners.
Advantages of Using Fundamental Stock Screeners
The main advantage of using fundamental stock screeners is that it helps in-depth research. The more you learn about a stock’s fundamentals, the more likely you are to understand the stock better — which leads to you trading better.
Fundamental stock screeners can also compare stocks between companies. This means you can examine multiple companies side-by-side and choose which one is more worth trading or investing in.
Final Thoughts
Fundamental stock screeners help users save time when performing fundamental analysis.
Technical analysis is better for day and swing traders because it focuses on short-term price fluctuations. But that doesn’t mean you should ignore fundamental analysis. Both types of analysis employ different approaches, so they’re good for different situations.
Good fundamental analysis should start with a GREAT stock screener. Choose one that fits your trading preferences and suits your needs.
Looking for a different kind of stock screener? Former software engineer and current millionaire trader Matt Monaco has just come out with one that mirrors his profitable trading style. It’s called the Alpha Scanner.
It’s full of trade alerts, live mentoring, and more. Can Matt’s life’s work be your edge in trading? Check out his presentation to find out…
Sign up to join the next Alpha Scanner LIVE broadcast!
Fundamental Stock Screener
What Are the Benefits of Using a Fundamental Stock Screener?
A fundamental stock screener is a powerful tool that helps investors identify potential investment opportunities by analyzing financial statements, earnings per share, and key metrics like the equity ratio. This tool allows for custom queries and screens, enabling users to filter through thousands of stocks to find those that meet their specific investment criteria. By using a fundamental stock screener, investors can make informed decisions and improve their chances of success in stock investing.
How Do Fundamental and Technical Filters Work Together in Stock Screeners?
Fundamental and technical filters complement each other in stock screeners by providing a comprehensive analysis of stocks. Fundamental filters analyze financial health, earnings ratios, and financial statements, while technical filters focus on stock charts, technical indicators, and chart patterns. Combining these filters helps investors identify strong stocks that meet both fundamental and technical criteria, leading to more informed investment decisions.
What Are the Key Features of a Fundamental Stock Screener?
An innovative stock screener offers a wide range of features such as real-time data, extensive charting capabilities, and interactive charts. It provides preset screens and the ability to create custom screens based on user-defined metrics and search criteria. This type of screener helps investors analyze a vast universe of stocks, including international stocks and high-growth companies, to find high-probability trading opportunities.
How Do Screeners for Stocks Help Beginners and Experienced Investors?
Screeners for stocks are designed to cater to both beginner and experienced investors by offering a variety of tools and filters. Beginner investors can use basic stock screeners with preset screens and simplified interfaces, while experienced traders can take advantage of advanced stock screeners with complex screening filters and custom indicators. These tools help investors at all levels make informed trading decisions and achieve their investment goals.
Why Are Real-Time Analytics Important in Stock Screening?
Real-time analytics are crucial in stock screening because they provide up-to-date information on current market prices, stock ratings, and potential trend reversals. Real-time scanning and real-time data ensure that investors have the most accurate and timely information to make informed investment decisions. This feature is especially important for active traders and institutional investors who need to react quickly to market changes.
What Role Do Financial Ratios and Earnings Growth Play in Stock Analysis?
Financial ratios and earnings growth are essential components of stock analysis. Ratios such as market capitalisation, debt levels, and earnings per share help investors assess a company’s financial health and potential for future growth. Analyzing these metrics, along with historical earnings and earnings growth, allows investors to identify undervalued stocks and make strategic investment decisions.
How Do Custom Indicators and Screening Filters Enhance Stock Selection?
Custom indicators and screening filters enhance stock selection by allowing investors to tailor their searches to specific criteria. This customization enables users to focus on particular financial data, market trends, and investment strategies. By using custom screens and indicators, investors can identify stocks that align with their risk tolerance, investment goals, and preferred metrics, leading to more precise and effective stock picking.
What Are the Advantages of Using Tools in Stock Screening?
Using a suite of tools in stock screening provides investors with a comprehensive set of features for analyzing and selecting stocks. These tools include detailed stock screening, backtesting capabilities, financial data history, and real-time analytics. Access to such a robust suite allows investors to perform thorough research, monitor potential investments, and make well-informed decisions based on reliable data.
How Do Institutional and Professional Investors Utilize Stock Screeners?
Institutional and professional investors utilize stock screeners to manage complex portfolios and identify high-probability trading opportunities. These screeners offer advanced features like proprietary ratings, detailed financial company reports, and real-time data. By leveraging these tools, professional investors can efficiently analyze a broad range of stocks, including those in the software industry and tech sector, to find standout investment choices.
What Are the Distinctive Features of an Accurate Stock Screener?
An accurate stock screener offers distinctive features such as real-time scanning, advanced technical screening criteria, and complex screening filters. It provides access to a vast universe of stocks, including cheap stocks, high-dividend yielding stocks, and oversold stocks. The screener’s ability to integrate custom indicators and financial data sources ensures precise and reliable stock analysis for informed investment decisions.
How Can Stock Screeners Help Identify Potential Investment Opportunities?
Stock screeners help identify potential investment opportunities by analyzing a wide range of fundamental and technical parameters. They provide tools to screen for strong stocks with positive earnings, minimal debt, and robust financial health. By evaluating these factors, investors can discover stocks with high upside potential and align their choices with their investment strategies and goals.
What Makes a Stock Screener a Popular Choice for Investors?
A stock screener becomes a popular choice for investors by offering essential tools such as financial ratios, investment criteria, and custom query capabilities. Features like interactive charts, detailed stock analysis, and reliable data sources enhance its utility. These screeners support both beginner and seasoned investors in making informed decisions and optimizing their investment portfolios.
How Do Real-Time Data and Interactive Charts Improve Stock Screening?
Real-time data and interactive charts improve stock screening by providing immediate insights into market movements and trends. These features allow investors to track current stock prices, analyze chart patterns, and make timely investment decisions. The ability to visualize data interactively helps investors understand market dynamics and identify profitable opportunities quickly.
What Are the Benefits of Using Custom Screeners in Stock Analysis?
Custom screeners offer significant benefits in stock analysis by allowing investors to define specific criteria and metrics for their searches. This customization helps investors focus on stocks that meet their unique investment strategies, risk profiles, and financial goals. Custom screeners enable a more targeted approach to stock selection, enhancing the accuracy and effectiveness of investment decisions.
How Do Financial Company Reports and Market Capitalization Data Aid Stock Selection?
Financial company reports and market capitalization data are crucial for evaluating a company’s overall value and market position. These reports provide detailed insights into a company’s financial performance, debt levels, and growth prospects. Analyzing this data helps investors identify strong stocks with solid fundamentals and potential for long-term growth, contributing to more informed stock selection.
How Can a Powerful Stock Screener Enhance Portfolio Analysis?
A powerful stock screener enhances portfolio analysis by providing tools for identifying stocks that meet specific investment criteria. Features such as search queries, fundamental parameters, and distributions of metrics allow investors to analyze a wide range of stocks and make informed decisions. This functionality helps in setting realistic price targets and building a diversified portfolio based on reliable data and analysis.
Why Are Canadian Stock Exchanges Important for Diversified Investments?
Canadian stock exchanges offer a list of stocks that can diversify an investor’s portfolio. By including Canadian stocks alongside American stocks — especially in sectors like cannabis and lithium — investors can leverage opportunities in different markets. Stock screeners that support multiple exchanges, including Canadian stock exchanges, provide a more comprehensive selection of tools for finding undervalued or high-growth stocks in various markets.
What Are the Benefits of Using a Stock Screener App?
A stock screener app provides the convenience of analyzing stocks on the go. These apps often come with standout features such as real-time data, simultaneous charts, and trading signals. Investors can use these apps to monitor current trends, identify bullish signals, and receive priority email alerts for potential investment opportunities. This mobility and real-time access enhance an investor’s ability to react quickly to market changes.
How Do Additional Features Like Social Trading Enhance Investment Decisions?
Additional features like social trading can significantly enhance investment decisions by allowing investors to see what stock market experts and other investors are trading. These platforms provide trading signals and investment advice based on community activities. Using social trading tools, investors can gain insights from experienced traders and refine their own strategies to achieve potential success.
Why Are Fundamental Stock Analysis Tools Essential for Investment Advisors?
Fundamental stock analysis tools are essential for investment advisors to provide informed investment advice. These tools analyze company fundamentals, such as outstanding shares and financial history, helping advisors create solid investment strategies for their clients. With features like a stock predictor and the ability to screen dozens of stocks, advisors can offer accurate and data-driven recommendations.
How Do Stock Screeners Support Identifying Strong Investment Choices?
Stock screeners support identifying strong investment choices by offering a suite of features, including distinctive data visualization and a range of screening filters. These tools help investors evaluate company fundamentals, financial history, and historical KPIs over different time frames. By using queries with custom criteria, investors can pinpoint stocks that align with their investment goals and risk tolerance.
What Role Do Resistance Levels and Oversold Conditions Play in Stock Analysis?
Resistance levels and oversold conditions are critical in technical stock analysis. Identifying these factors helps investors make informed decisions about entry and exit points. Stock screeners that include parameters for resistance levels and oversold conditions allow investors to detect potential trend reversals and capitalize on market opportunities.
How Do Integrated Hardware & Software Tools Enhance Stock Screening?
Integrated hardware and software tools enhance stock screening by providing seamless access to comprehensive data and analysis capabilities. These tools often feature detailed stock screening, real-time analytics, and the ability to monitor current trends. The integration ensures that investors have all the necessary information at their fingertips to make well-informed decisions.
How Do Stock Screeners Help Identify Stocks with High Potential?
Stock screeners help identify stocks with high potential by offering robust filters and parameters. Investors can use these screeners to create lists of tech stocks, American stocks, or companies with specific fundamental strengths. By setting specific criteria, such as market cap, earnings growth, or industry performance, stock screeners can highlight stocks with the strongest investment potential.
Why Are Reliable Sources Important in Stock Screening?
Reliable sources are crucial in stock screening to ensure the accuracy and credibility of the data used for making investment decisions. Using stock screeners that draw from reliable financial data sources and provide information for educational purposes helps investors make better-informed choices. Accurate data is the foundation of effective stock analysis and investment strategy development.