Stock Screeners and Watchlists in Investing and Trading

Nov 24, 2021 12:03 PM ET
Stock Screeners and Watchlists in Investing and Trading

There are more than 5,000 publicly traded companies in the United States. The number is significantly higher when you look at it globally. Additionally, this number dramatically grows when you add exchange-traded funds (ETFs). Therefore, selecting a few companies to invest in or trade can be a herculean task. This article will look at what a stock screener and a stock watchlist are and identify how you can use them well. 

What is a stock screener?

A stock screener is a platform that enables you to sieve companies based on the specific features that you want to see. For example, if you are a technology stocks trader, you can use a screener to remove the noise of other sectors and see tech firms alone. 

Similarly, if you are an oil and gas trader or investor, you can sift through all stocks listed in the US and see just those in the same sector alone. You can then do other additional analyses to find the best stocks to invest or trade with your preferred list.

A stock screener’s role is to eliminate the noise that is often in the stock market and then narrow down your focus to what you want. 

Types of key screeners

In the two examples, we have looked at a screener that focuses on companies’ sectors. These are some of the essential details that both investors and traders query. Still, there are many other types of screeners that one can use in the market. Below is the list of popular screeners.

  • Market cap screener - This is where you decide to screen stocks based on their market capitalization. For example, if you are only interested in mega-cap companies, you can eliminate stocks that have a smaller valuation.

  • Revenue screener - At times, you might want to trade companies that have revenue of a certain amount. You can use a screener to find these firms.

  • Growth screener - You can use a screener to find companies with a specific growth rate, say,  identifying tech companies with an annual growth rate of more than 20%.

  • Valuation multiples - Another type of screener is one that looks at a company's valuation multiples. Some of these multiples are price-to-earnings (PE), price-to-sales (PS), and EV to EBITDA.

  • Performance - You can use a screener to see the overall performance of stocks. For example, you can see stocks that have risen or fallen by a certain percentage in a certain period.

There are other popular ways of running a stock screener. For example, you can run a screener that identifies companies based on their profitability, technical analysis features, and the most active.

Specialized stock screeners

In addition to these, other types of stock screeners can make life easier for you as a trader or investor. Indeed, some platforms like Yahoo Finance have these screeners, as you can see below.

In this example, you can see that Yahoo Finance has several screeners. For example, it has a list of the most shorted stocks, which can help you identify companies that could go through a short squeeze. It also lists the most undervalued growth stocks, day gainers, losers, most active, and small-cap gainers, among others. 

Therefore, if you want to find the best growth stocks to invest in, you don’t need to look at them one by one. Instead, you can use a screener and identify these stocks.

Yahoo stock screener

In the chart below, we have clicked on the most shorted stocks in the US. The screen shows that companies like Workhorse Group, Big 5 Sporting Goods, Esperion Therapeutics, and Beam Global have the most significant short interest. Most shorted American stocks

Therefore, you can then go to the next step and identify whether they are suitable investments or not.

Best stocks screeners to use

Many companies offer these screeners for free. In the example above, we have shown that Yahoo Finance has one of the most reliable stock screeners in the market. In addition to the specialist screeners, you can also use a Do It Yourself (DIY) screener, as shown below. In the screener, we see American stocks that are both small caps and tech companies. Their share prices are also at a 52-week high.

US small-cap tech stocks

Other companies that provide excellent stock screener tools are Investing.com, Market Chameleon, Webull, and Barchart.com.

What is a watchlist?

Another important aspect in trading and investing is known as a watchlist. There are two main types of a watchlist in the market.

First, as a market participant, you can create a personal list of companies you follow and those you plan to invest in or trade. This is known as a watchlist. For example, if you are not interested in the thousands of stocks offered in the market, you can create a narrow list of portfolios that you will focus on. For example, the chart below shows a watchlist that is created in Webull. 

watchlist example

Another type of watchlist is one that narrows down the stocks making big moves in the market. It will then explain why the shares are either rising or falling and the reason behind the movement. 

Summary

Stock screeners and watchlists are critical tools that will save you a lot of time and help you find the next high-quality setup. As a trader with years of experience, I have found it easy to use these tools. I have also saved a valuable amount of time in researching stocks. In this article, we have looked at how these tools work, showed examples of them at work and mentioned some of the best tools to use.


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