All You Need To Know About Stock Screener: What Is It, How To Use, Importance & Benefits

Stock Screener

Stock marketing is one of the most popular ways of making fruitful investments and maximizing profits. However, it is not as easy as it sounds, especially if you’re a beginner. Investing in a stock market requires proper research, analysis and smart decision-making, which takes a lot of time and experience. Thankfully, there are tools like stock screeners that allow traders to make the most out of their investments. In this article, we will discuss each and everything about the stock screener in India, including what exactly it is, why it is important and how to use it. So, let’s get started!

What is a Stock Screener In India?

In simple terms, a stock screener in India is an effective tool used by investors or day traders for filtering out the most profitable stocks based on some predefined metrics. Just like you use filters while shopping on an online platform, a stock screener provides you with a number of choices depending on different criteria, which you can set and get the stocks that match it. There is a wide variety of stock screeners, some are individual, while some are provided on the trading platforms themselves. Moreover, a stock screener in India can be either free or at a subscription fee.

How A Stock Screener In India Works?

As discussed above, a stock screener allows investors to select the best stocks that will offer great returns in the future. Traders use this tool to identify investment opportunities.

About its working, a stock screener separates or screens the stocks on the basis of factors like price, dividend ratio, debt-to-equity ratio, P/E ratio, market capitalization, etc. You can apply as many filters as you want depending on your investment objectives, but the number of listed stocks gets low with the increase in applied filters.

Also, the filters of a stock screener in India are only effective when you have a clear understanding of your investment goals, the companies you want to invest in, etc. In short, a stock screen helps you in finding the right stocks provided that you know how to leverage the full capabilities of this tool.

Benefits of Using a Stock Screener in India

There are mainly three major benefits of using a stock screener in India :

  • Saves Time
  • Removes Biased Decision-making
  • Presents Best Investment Opportunities

Let’s discuss each of these benefits in detail :

Stock Screener Saves Time

Perhaps the biggest perk of using a stock screener in India is that it saves you a significant amount of time. It does the job of hours in minutes, meaning the result you’d achieve after manually searching and analyzing stocks in hours and days, can be achieved in minutes using a screen stocker.

There are tens of thousands of stocks available out there, so manually selecting the right ones is definitely a tedious task. And even after you spend hours or days researching the companies, analyzing their financial statements, ratios, market cap, historical and future prospects, there is no guarantee that you’d succeed in finding the best stocks.

But things escalate faster with a stock screener. Once you’ve determined your desired metrics on the basis of your goals and objectives, the screener will filter out the stocks that aren’t useful to you and present you with the most “creamy” layer that will bring you the best profits. And what makes it a powerful tool is the fact that it provides results in just a few clicks, in minutes!

Stock Screener Removes Biased Decision-making

As per basic human nature, investors and traders have a natural tendency to make decisions driven by their emotions and behaviour, which can be very risky. Such decisions can be fatal in stock marketing because they can put your entire capital to risk. That said, decisions should be unbiased, informed and practical while stock marketing.

“Behavioral biases” is the term used to refer to decisions that are based on human emotions and behaviour such as fear, greed, trust, loyalty, etc. For example: Investors often select stocks even when the company has a poor financial background and further prospects, just because they are familiar with the company and have used its products or services for a long time. And when this happens, they end up risking their hard-earned money when those stocks crash.

Stock screeners eliminate such behavioural biases and help investors to remain firm on their objectives.

Stock Screener Presents Better Investment Opportunities

Another great advantage of using a stock screener in India is that it allows you to explore the less popular stocks that have great potential to maximize your returns in the future. Such stocks are generally less hyped and undervalued in the market. This means you can buy them for dirt cheap prices and watch them as they rise and shine.

How To Use A Stock Screener in India?

Stock screening helps in making risk-free investments.

Now that we have discussed what a stock screener is, how it works and what are its benefits, let’s now learn how you can use it for making the most out of your investments!

So, the very first step is selecting the right tool. There are hundreds of stock screeners in the market, but not all of them are built equally. You have to select a tool that is reliable, trusted and offers better functionalities. Some other factors that you need to keep in mind while selecting a stock screener is its database, available screening criteria, any personal preferences of yours and of course, the cost.

Once you’ve selected your stock screener, the second step is to determine the metrics you want to use for the screening process. To begin with the basics, you can take into account the general criteria such as P/E ratio, market cap, growth, etc.

After having a collection of stocks based on your screening, you need to pick up the ones that qualify for the final analysis, which involves going in-depth with the fundamentals. This part requires fine-tuned research, so do your homework prior to using a screen stocker. Stock screeners are one of the important tools in a smart investor’s toolkit. While there is no doubt they help you in making mindful investments, you still need to perform your own market research to safeguard your investments. We have discussed everything about the stock screeners and how they can help you. We hope this comprehensive guide helps you.