Selecting good stocks isn't easy. Whether you're focused on
small cap growth or large cap value and everything in between,
there are so many stocks to choose from.
With roughly 15000 publicly traded companies listed on major
U.S. exchanges and in various over-the-counter markets, the task of
separating the outstanding companies from the rest can be a very
daunting task. But with the assistance of some free stock screening
tools, this part of the research process can easily be simplified.
***The sheer volume of publicly traded companies makes finding a
good small cap stock difficult. Add in the enormous amount of stock
data available on each stock, and it's easy to be overwhelmed.
Fortunately, a stock screener can help you focus on the stocks that
meet your standards and suit your strategy. In this issue of
SmallCap Investor Daily
, I'll discuss how you can use stock screeners to make your
investment research time even more productive by looking into the
A stock screener is a powerful tool that helps to assist in
finding stocks based on certain financial criteria. A screener is
comprised of a database of companies, a set of variables and the
screening engine that finds the companies that meet your defined
variables. The result of the search is a list of companies that
meet your defined criteria.
Using a stock screener is easy. All you have to do is know the
metrics and variables that you require for your stock search. Think
of it as being like Google, but for finding stocks.
With this software, you can define a wide range of criteria
including market capitalization, industry, P/E ratio, and revenue
growth. While these are just samples of searchable criteria, the
list with most of these software solutions is much more extensive.
***Let's go through an example using one of the best free stock
screeners on the internet -
We really like Israeli tech stocks and actually hold a few in
Small Cap Investor Pro
portfolio. That being said, let's say we are looking for a small
cap Israeli technology stock that trades on the NASDAQ, has a P/E
ratio below 25 and has net profit margins over 30 percent.
The first thing we want to do is click on the
tab on FinViz.com
. Once we are on the screener page we then want to then click on
the "All" tab.
Here is what the screener looks like on FinViz.com:
After we enter these criteria into the screener, the software
gives us the list of companies that make it through each of our
filters. You can see our requirements highlighted in yellow.
***Because my search criteria were very specific, there were
only two companies that fulfilled the requirements and are now
worthy of further analysis.
Commtouch Software Ltd. (Nasdaq: CTCH)
Mind C.T.I., LTD. (Nasdaq: MNDO)
Readers of SmallCapInvestor Daily know that I already wrote
about Mind C.T.I. last month in a daily article,
"SmallCap, High-Yield Israeli Tech Stock Primed For
In tomorrow's issue of SmallCap Investor Daily I will examine
Commtouch Software. I will use a few of the key metrics I have
discussed lately including
As you can see screens can be a great starting point for your
research process as they save time and narrow your options down to
a manageable group. Knowing how to screen and specifically what to
look for is a major battle for most investors that go it alone.
That is why we are here to help you along the way. I intend to go
through screens on a regular basis to help you with the process of
finding great small cap stocks. Once we find potential companies
you can do the rest of the research yourself or you can join our
investment newsletter service and let us do the research for you (
just click here now to try the service today - 100%
Without a proper stock screener and 15,000 publicly traded
companies, you really are lost. There are a myriad of tools and
metrics available for you to evaluate a whole variety of aspects of
a stock. Make your life easier and take advantage of these free
tools. Start screening your stocks today to uncover real value and
find the hidden gems that grow your portfolio to new heights.