General Characteristics You Can Use to Screen Online Stocks

By Matt Krantz

The number of characteristics you can use to screen stocks is virtually unlimited. If you can measure it, you can screen stocks for it. Even so, most investors use the following primary measures in screens:

  • Company information: I’m talking basic elements of companies’ location, size, or industry here. Common criteria you might use would include the number of employees, the stock market exchange the stock trades on, the industry the company is in, and what stock market index the company is part of. How much money the company brings in — its revenue, in other words — is also important.

  • Trading characteristics: This category deals with how the stock has been moving. You can search for stocks that tend to swing more or less than the general stock market, stocks that are close to their high or low during the past year, and stocks that trade hands between investors more often or less often. You can also find companies that investors are betting against by shorting the stock.

  • Market value: This measures how much the company is worth. Market value is used to determine whether a company is small, mid-sized, or large.

  • Profitability: The level of earnings and cash flow a company generates is of utmost importance to investors. Not surprisingly, you can search on both earnings and cash flow. You can drill down even further by looking for specific things about profits, including how quickly profit has grown over the most recent quarter, year, or over the longer term.

  • Analyst ratings: Analysts often evaluate stocks and rate them as a buy, hold, or sell. You can set up your screen so that it finds stocks with a certain rating.

  • Valuation ratios: Investors pay close attention to how much they’re paying for companies, or what’s called a stock valuation.

  • Dividends: These periodic cash payments made by companies to shareholders are important because they account for about a third of many large companies’ total return. Dividends are also widely watched because they’re an indication of a stock’s valuation.

Many stock screens use the cryptic terms TTM and MRQ to describe the time frame in which you’d like to base your search. TTM means trailing 12 months, which means the most recent 12 months. MRQ is the most recent quarter.