Tool Kit

Stock Screening

Stock screening is the process of finding specific stocks that meet a given set of investment criteria. Generally, the difficulty in stock screening does not lie in the execution of a stock screen but rather in determining what specific criteria should be used to filter the thousands of publicly traded stocks.

For instance, there are many criteria you may select to create a successful stock screen. First, you might want to select a range of market capitalizations. Second, you may want to select a sector or industry to focus your list further. Lastly, you may want to further narrow down your screen by adding specific corporate characteristics that you find desirable. Some examples include growth of revenue and earnings, volatility, debt-to-equity ratios, beta and many others. With a little experimentation, you'll be able to generate a list of 10-50 stocks that may warrant further investigation.

Here are some examples to demonstrate how one can "whittle" down a list of stocks using various criteria (numbers vary depending on the screener you are using). These examples are intended to only spur creativity on your part and should not be viewed as mandatory for your particular fund.