Automatic Stock Screening
Stock screening is the process of searching for stocks that meet certain predetermined investment and financial criteria. A stock screener has three components: a database of companies, a set of variables and a screening engine that finds the companies satisfying those variables to generate a list of matches. Automatic screens query a stock database to select and rank stocks according to user-specified (or pre-specified) criteria. Technical screens search for stocks based on patterns in price or volume. Fundamental screens focus on sales, profits, and other business factors of the underlying companies. By focusing on the measurable factors affecting a stock's price, stock screeners help users perform quantitative analysis. Screening focuses on tangible variables such as market capitalization, revenue, volatility and profit margins, as well as performance ratios such as the PE ratio or debt-to-equity ratio. For example, an investor may want to do a search using a screen for all those companies that have a price/earnings ratio of less than 10, an earnings growth rate of more than 15%, and a dividend yield of more than 4%.
Read more about this topic: Stock Selection Criterion
Famous quotes containing the words automatic and/or stock:
“She smoothes her hair with automatic hand,
And puts a record on the gramophone.”
—T.S. (Thomas Stearns)
“In the case of our main stock of well-worn predicates, I submit that the judgment of projectibility has derived from the habitual projection, rather than the habitual projection from the judgment of projectibility. The reason why only the right predicates happen so luckily to have become well entrenched is just that the well entrenched predicates have thereby become the right ones.”
—Nelson Goodman (b. 1906)