The Definition of Stock Screener - How Can You Make Use of It

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Stock Screener - What You Need to Know About It
One fact is true and you can not argue with me about it: choosing the stock is the hardest decision ever to make with so many of them available out there. Everybody wants to get the best ROI once they decide to invest on this market. So the choice is seen by many stock investors as a really challenging one.

However, there is one solution to go around this issue: making use of stock screener that can help you select the stocks that comply with certain criteria. But let's find out the definition of these stock screeners to have a better understanding on how you can avail them:

As it happens with many stock traders, you will have to outline some criteria in accordance to which you need to make your choice. With the aid of these screeners you can search for specific stocks that comply with these criteria. These stock screeners are made up of 3 different parts:

1. The first part comprises a database of all companies that are involved in stock trading activity.

2. The second part consists of a set of questions that you need to answer to. This will help the screeners identify the types of stocks you are interested investing into. These questions are related to information such as stock size, stock price, current trends, volatility, the ratio related to price-to-earning, profit margin and the ratio related to debt-to-equity.

3. The third part consists of a screening program to assist you into sorting the companies that comply with your selection criteria.

It is not difficult to make use of these stock screener tool because all you have to do is to follow the steps and then you will be provided with a list of stocks that meet your criteria. It is also important to make use of quantitative analysis for selecting the right stock.

There are various types of screeners, such as two basic types:

- Customizable stock screener - this one enables you to have the questions customized in order to benefit from the accurate results.

- Predefined stock screener - this one comes with a preset range of questions commonly used by several stock investors. It comes as the best solution for you in case you are a beginner in this activity.

There is one thing that you should take into account when making use of stock screener tool: it will usually provide quantitative information about the stocks but will not factor in qualitative information. You should do some research into learning more about the level of satisfaction of the customers using this tool. Another thing that you should know is that several of these screeners are not updated as compared to others.

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