May. 16, 202413 min read

Top 5 Best Stock Screeners for Undervalued Stocks in 2024

Tim BohenAvatar
Written by Tim Bohen

A stock screener for undervalued stocks is a tool that helps you look for undervalued stocks. It can take the thousands of tickers on the stock market and filter them down to a manageable handful that you can research further to determine whether they’re worth trading. 

Undervalued stocks sound great on paper — you can buy them at a lower price, then sell them when the market price reflects their perceived value. But there’s more to trading undervalued stocks than that. In this article, I’ll show you how to find and evaluate the best undervalued stocks to trade!

What are the best stock screeners for undervalued stocks, and how can they help you find these cheap stocks? Let’s dive right in!

What Are Undervalued Stocks?

Undervalued stocks are stocks that are priced below their perceived intrinsic value. People often trade undervalued stocks expecting to see profits when their prices catch up with their intrinsic value.

How to Evaluate Undervalued Stocks

You can evaluate undervalued stocks by looking at certain indicators, like their price-to-earnings ratio (P/E ratio) and earnings per share (EPS). 

A low P/E ratio signifies a low share price compared to the company’s annual earnings, which might mean its stock is undervalued. Meanwhile, a high EPS signifies a profitable company.

You can’t guarantee that the price of an undervalued stock will eventually catch up to its “value” though. Sometimes, undervalued stocks are priced at a seeming discount because they have a bad growth forecast or the companies are in a flagging industry. 

Doing your due diligence is essential. Look at the company’s financials and examine its track record to determine its share value prospects before trading. Knowing more about the stock’s ins and outs increases your likelihood of making smart trades.

What Is a Stock Screener for Undervalued Stocks?

A stock screener for undervalued stocks is a tool that helps you find undervalued stocks. You can just plug in your preferred criteria and filter the thousands of stocks you can trade into a handful of tickers you can put in your watchlist and dive deeper into.

Read my article about the basics of stock screeners to learn more about why it’s important to use them.

Importance of Using an Undervalued Stocks Screener

Using an undervalued stock screener helps you find the stocks that match your preferences and trading strategies. Understand — finding a good undervalued stock is more about researching than screening, but you can’t research every single stock.

Using an undervalued stock screener gives you a curated selection of tickers you can dive deeper into, so you can determine whether their share price will eventually reflect their perceived value.

Why Do You Need a Stock Screener for Undervalued Stocks?

You need a stock screener for undervalued stocks to filter out the stocks that don’t match your trading strategy or preferences. This way, you can cut down the flow of information to make it more manageable.

Think of a stock screener as a sieve — you pour all the stocks in an exchange into it and let the ones that don’t match your criteria pass through. Then, all you’re left with are the stocks that match your criteria.

You also need a stock screener for undervalued stocks because it gives you lots of fine control over your searches. This means your scanner will only give you the stocks that perfectly fit your criteria — which sometimes might include relevant stocks that you previously overlooked.

Different stock screeners cater to different trading needs. Check out my lists for the best stock screeners for dividend yields and the best stock screeners for growth stocks. You can also read my top overall stock screener picks.

Advantages of an Undervalued Growth Stock Screener

The most important advantage of undervalued growth stock screeners is their ability to filter stocks according to your criteria. This means they only return the handful of stocks you’re interested in trading in the first place from the thousands of tradable tickers.

Stock filtering also helps in your research. Instead of looking deeper into hundreds or even thousands of stocks, you can just research the stocks that your screener gives you.

How We Evaluated These Best Stock Screeners for Undervalued Stocks

Not all stock screeners are cut out to scan for undervalued stocks. You gotta pick the right one — which means you have to know what you’re looking for.

Here are two criteria I use when looking for undervalued stock screeners:

  • Pricing: Most high-quality undervalued stock screeners are paid products. Find the screener that fits your budget while still catering to your trading needs.
  • Customizability: A stock screener is only as good as its indicators. Find a stock screener that you can customize according to your needs.

Those aren’t the only criteria I use. Check my guide to the best stock screener criteria for additional ways to refine your search.

Best Undervalued Stock Screeners

Here are my picks for the best undervalued stock screener platforms:

  • StocksToTrade — Best Overall Undervalued Stock Screener
  • TrendSpider — Best Undervalued Stock Screener for Automated Trading
  • StockRover — Best Undervalued Stock Screener for In-Depth Research
  • Black Box Stocks — Best Undervalued Stock Screener for Options Trading 
  • TC2000 — Best Undervalued Stock Screener for Comparing Stocks

There’s no rule that says you gotta use one screener — try them all and stick with the ones that work best!

1. StocksToTrade — Best Overall Undervalued Stock Screener

My first undervalued stock screener pick is StocksToTrade.

There are so many reasons why StocksToTrade tops my list. StocksToTrade is insanely customizable, comes with loads of trader-built screens, and more. It’s also great for screening for undervalued stocks — it has indicators like EPS and P/E ratio built in.

Its true strength is in trading though. If you have a strategy balanced between long-term and short-term trading, it’s an awesome resource!

StocksToTrade also comes packaged with Oracle, a powerful algorithm-based chart analysis tool. This nifty piece of technology spots the day’s most tradable stocks and gives you actionable trade signals. Get a taste right now by signing up for NO-COST Oracle trade alerts!

Try out StocksToTrade and see how it can change the way you trade — sign up for a 14-day trial for just $7!

2. TrendSpider — Best Undervalued Stock Screener for Automated Trading

My second undervalued stock screener pick is TrendSpider.

TrendSpider offers some of the best trading bots in the business — no programming skills needed. All you need to do is set specific trading requirements, and the bot will do the rest for you.

TrendSpider’s market scanner works just as you’d expect — you plug criteria in, and it returns stocks matching your requirements. It offers loads of pre-built scans as well as lets you make custom scans of your own.

3. StockRover — Best Undervalued Stock Screener for In-Depth Research

My third undervalued stock screener pick is Stock Rover.

Stock Rover offers in-depth research data on thousands of tickers that help you to estimate a stock’s fair value. In addition to helping you identify which stocks are undervalued, you may also get a good feel for the stocks’ growth potential.

Stock Rover’s scanner is also pretty robust — you get 140 pre-built screeners right out of the box. You can also build custom screeners with over 650 metrics and indicators to fit your trading preferences.

4. Black Box Stocks — Best Undervalued Stock Screener for Options Trading

My fourth undervalued stock screener pick is Black Box Stocks.

Black Box Stocks is all about the most accurate, to-the-second real-time data. If you’re a value investor, you might not think this is a big need…

If you’re looking to trade options on undervalued stocks, accurate market data is HUGE. Black Box Stocks streams current market data for over 900,000 possible options contract configurations.

Its dedicated options screener is also a beast. It’s filled with nifty capabilities, like identifying options trades executed above the ask. These can give you valuable clues to demand…

The rest of its offerings are pretty damn powerful too! 

5. TC2000 — Best Undervalued Stock Screener for Comparing Stocks

My fifth undervalued stock screener pick is TC2000.

TC2000’s EasyScan scanner makes comparing the stocks you filtered a simple process. This way, you can rank your filtered stocks based on how likely they’ll rise in price or any other metric you have in mind.

TC2000 is also highly customizable. You get over 100 premade filters right off the bat, and you can make even more with its code-based custom scan creator. While it has a bit of a learning curve, once you get the hang of this scan creator the market will be your oyster!

Final Thoughts

A stock screener for undervalued stocks helps you find stocks that are priced below their perceived value. By using screeners, you can find undervalued stocks that match your trading strategies, so you can research them further.

But be careful when hunting undervalued stocks. Sometimes a company’s share price just won’t rise to match the company’s value. You have many reasons for this happening, from a bad growth forecast to being part of a flagging industry. That’s why you need to dig deeper to make sure the undervalued stock becomes properly valued down the line.

Here’s another stock screener for you to try: millionaire trader Matt Monaco’s Alpha Scanner. With his software engineering background, Matt built a stock screener based on his profitable trading style — and his life’s work can be your edge in trading.

The Alpha Scanner is jam-packed with live mentoring sessions, trading alerts, and so much more. Want to learn more?

Sign up for the next Alpha Scanner LIVE broadcast for more information!

Undervalued Stock Screener FAQs

What Key Metrics Should Be Analyzed to Find Undervalued Stocks?

To find undervalued stocks, analyze key metrics such as the price-to-book ratio, earnings yield, return on equity, and current ratio. Reviewing financial statements and calculating financial ratios help identify stocks trading below their intrinsic value. Additionally, examining the price/earnings-to-growth (PEG) ratio and growth rates offers insights into future performance and potential for appreciation.

How Does Fundamental Analysis Help Identify Undervalued Stocks?

Fundamental analysis is crucial for identifying undervalued stocks by evaluating a company’s financial health through its financial statements, cash flow, and equity per share. This approach involves analyzing historical earnings and future cash flows to assess intrinsic value. By comparing current market prices to these evaluations, investors can identify stocks that are trading at a discount.

What Role Do Financial Ratios Play in Finding Undervalued Stocks?

Financial ratios such as the debt-to-equity ratio, equity ratio, and book ratio are essential for assessing a company’s financial strength and stability. These ratios help investors determine whether a stock is undervalued by examining aspects like debt levels, equity per share, and overall financial health. Using these metrics can guide investment decisions and strategies.

How Can Stock Screeners and Online Tools Aid in Finding Undervalued Stocks?

Online stock screeners and tools like Morningstar Investor provide access to various filters and metrics to identify undervalued stocks. These tools allow investors to screen for specific criteria, such as low P/E ratios, strong cash flow, and minimal debt. By using these resources, investors can efficiently find potential investment opportunities.

Why Are Current Market Conditions Important in Evaluating Undervalued Stocks?

Understanding current market conditions is vital for evaluating undervalued stocks as market volatility and economic factors can impact stock prices. Factors like unemployment rates, industry trends, and market sentiment affect the perceived value of stocks. Monitoring these conditions helps investors make informed decisions and capitalize on undervalued opportunities.

How Do Earnings and Growth Prospects Influence Stock Valuation?

Earnings growth ratio and earnings potential are critical factors in stock valuation. Stocks with strong earnings and positive growth prospects often indicate undervaluation if their current stock price does not reflect their true potential. Analyzing these factors can reveal opportunities for significant returns.

What Is the Importance of Analyzing Dividend Payments and Cash Flow?

Analyzing dividend payments and cash flow is essential for finding undervalued stocks. Stocks with strong cash flow and consistent dividend payments often indicate financial stability and long-term value. These metrics provide insights into a company’s ability to generate profits and return value to shareholders.

How Can Industry Averages and Sector Analysis Help Find Undervalued Stocks?

Comparing individual stocks to industry averages and analyzing sectors, such as the energy sector or tech stocks, can highlight undervalued opportunities. By understanding industry norms and sector performance, investors can identify stocks that are undervalued relative to their peers. This approach helps in finding stocks with upside potential.

What Role Do Professional Investors Play in Identifying Undervalued Stocks?

Professional investors like Warren Buffett and Charlie Munger use specific criteria and strategies to find undervalued stocks. Following their advice and methodologies, such as focusing on quality stocks with strong fundamentals, can guide individual investors. Investment advice from reputable sources helps refine investment strategies and improve decision-making.

How Can Quantitative and Technical Analysis Complement Fundamental Analysis?

Quantitative analysis and technical analysis provide additional layers of insight when finding undervalued stocks. Quantitative analysis involves statistical and numerical evaluation, while technical analysis focuses on price movements and trends. Combining these with fundamental analysis offers a comprehensive approach to identifying undervalued stocks.

What Is the Significance of Monitoring Public Market Offerings and Price Movements?

Monitoring public offerings and price movements can help identify undervalued stocks. Stocks that are newly listed or experiencing significant price fluctuations may present opportunities for value investing. Understanding these dynamics allows investors to spot undervalued stocks early and make strategic investments.

How Do Alternative Valuation Methods Enhance the Search for Undervalued Stocks?

Using alternative valuation methods, such as discounted cash flow analysis and relative valuation, can enhance the search for undervalued stocks. These methods offer different perspectives on stock value, complementing traditional metrics. This multifaceted approach helps investors identify stocks with hidden value.

How Can Access to Lists and Breaking News Aid in Identifying Undervalued Stocks?

Access to lists such as the 52-week low list and breaking news updates can highlight stocks that are potentially undervalued. Staying informed about market developments and current events helps investors identify stocks that are temporarily undervalued due to market overreactions or news events.

Why Are Investment Strategies and Diversification Important in Finding Undervalued Stocks?

Developing sound investment strategies and diversifying portfolios are essential for managing risk while finding undervalued stocks. Strategies such as value investing and diversification across different sectors and asset classes help mitigate risk and enhance returns. This approach ensures a balanced and resilient investment portfolio.