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Chroma
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I am film and television producer who writes a value investing oriented blog called Chromainvesting.com. I try to explore the Deep value orientation of Graham, with an updated perspective that includes the work of Behavioural Finance gurus such as James Montier.
  • Finding the Best Value Investing Stock Screener  5 comments
    Aug 24, 2011 1:33 AM

    Stock Screeners are software that sort through a number of facts about companies using specific criteria. This sifting or "screen" acts as a sieve to filter out undesirable companies. To busy investors a good value investing stock screener is essential Investing software. They help cull the herd and target what an investor is specifically interested in. For example, in last weeks Value Investing Criteria that works Low Price to Free Cash Flow I wrote about a back tested theory that used Dow Jones Industrial Average Companies that have a Price to Free Cash Flow of less than 15. If you set up a custom value investing screener for those criteria, the only companies that would pass the criteria  are displayed.

    Some stock screeners  have just a few items to choose from. For these to be useful they should have at least one very compelling criteria that is not available elsewhere. Other value investing screeners have a multitude of inputs and customizable screening inputs and calculations that enable you to create completely custom screens. Any stock screener is just one of many ways to find potential investing candidates. The important thing to remember is that Stock screening is just the first step. It is not a magic bullet. You will need to do additional research and most importantly double check that the screen worked correctly and that the companies that passed are up to your investing standards.

    My favorite Value Investing Stock Screeners:

    I have broken these down into categories. Let's start with the cheap and the easy and move toward the expensive and complicated.

    Free Value Investing ScreenersGeneral Stock Screeners

    Bing Finance -

    Bing took over for MSN and their screener has several preset Value Investing screeners, including Value, Contrarian, Dogs of the Dow etc. The main advantage of this stock screen is its simplicity. A great one to get your feet wet, but you will quickly run into its limitations.

    Morningstar

    There was a time I relied on Morningstar for my preliminary financial data.  Until I realized that they did not always have accurate data and their customer response to complaints on this front was underwhelming in the least.  They still have a basic free stock screener, which might we worth a look at since, you can utilize some of Morningstar's evaluations on financial health, growth etc. I do not recommend their premium screeners or information.

    Specialized stock screeners

    Motley Fool CAPS

    The Motley Fool Caps has a very simple stock screener. You can't do a whole lot with it, but I like it because you can incorporate the CAPS rating system into their screen, which is interesting since a study showed that is a useful ally in outperforming the market. The whole wisdom of the crowds idea.

    Magic Formula Screeners

    Magic Formula

    The Magic Formula website has its own screener. The parameters are essentially the market cap. That's it! Starting with $50 million and sliding up. It spits out companies that pass the Magic Formula screen. Interesting when coupled with other criteria, although I don't use it by itself. As I have written about in the past some of the companies that pass the screen can be speculative in nature. That is why you need to take the results and apply another screen to it or evaluate using different criteria.

    Alternate Magic Formula -

    this is some version of an alternate  magic formula that someone set up that has higher liquidity and market cap requirements than the official Magic Formula site. I think it is interesting and if liquidity is really important to you this might be helpful.

    NCAV - Net Net Screeners

    Graham Investor screener is another free set of value investing screeners that are definitely flawed. The Piotrowski screener does not follow the F-score study suggestions, so is likely less than optimal. They have two Net Net Screeners based on shares outstanding and float. I use it occasionally since interesting companies show up on these screens, but many are not really Net Nets, so be careful and do your own follow up work.

    Super Low Price Value Investing Stock Screener

    American Association of Individual Investors stock screens - Not all the aaii screens are value investing screeners, but many are. For more detail see my post on value investing screeners. Free to members. $25 yearly fee. Highly recommended for beginning value investors. The screens are all pre-set and you can't customize unless you buy the premium software they also sell Stock Investor Pro.

    Premium Stock Screeners

    Stock Investor Pro

    SIP is a premium screening software package that the AAII offers to its members for $198/year and $248/yr for non members. It is an amazing piece of software. It is very customizable and I have more than a dozen custom screens I have developed using this Stock Investor Pro. There are two drawbacks. The data is updated once a week on Saturday, from the aaii site. The bigger problem for me was that it is PC only. I have to run a PC emulator known as vmware to run the program on my Mac. I have gotten over it, but the interface is very inelegant and PC looking and has no real design. All that said, since I started using SIP I almost don't use any other screeners.

    Gurufocus

    Gurufocus has several value screeners that are part of their premium $249/yr. services. These are largely value investing screeners including NCAV screener, low price to book, low price to sales, and Undervalued Companies, they do offer one free screen called 52 week lows. I use their premium services for their newsletters more than their screeners, but if you subscribe to the newsletters you have the stock screeners for free.

    Value Investing Europe

    This premium value investing screener has several interesting screens including Piotroski F score screen, The Graham Investor has one as well but it is implemented incorrectly (doesn't screen for low price to book first before looking at F score), Value Investing Europe does screen correctly, their screens are not limited to Europe, they also include the United Kingdom,  US and Japan as well. The price, just for the screeners is 249 Euros/yr. They also offer newsletter services.

     Ultra Premium Stock Screeners

    Capital IQ-

    This ultra expensive but terrific stock evaluation software is so expensive that it is not appropriate to small time value investors, and the only beginners that it would be appropriate for are investors with large portfolios.

    No matter what your budget and your needs their is some value investing screener out there that will fit. More information on value investing please go to chromainvesting.com.

    Disclaimer: I do not currently have a financial relationship with any company described in this article.

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Comments (5)
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  • xtddd
    , contributor
    Comments (326) | Send Message
     
    Stock Investor Pro is a good choice!
    10 Mar 2013, 10:59 PM Reply Like
  • Lenny Grover
    , contributor
    Comments (108) | Send Message
     
    If you like Stock Investor Pro, you will love Screener.co (https://screener.co). We built it to be more intuitive and easy to use than Capital IQ while offering a lot of the same advanced capabilities at a $24.95/month price point for individual investors. I would appreciate your feedback on the tool if you get a chance to give it a spin.
    20 Oct 2013, 05:30 PM Reply Like
  • xtddd
    , contributor
    Comments (326) | Send Message
     
    i think it is a litter expensive!
    9 Mar, 02:33 AM Reply Like
  • odambrine
    , contributor
    Comments (2) | Send Message
     
    Value Investing Europe is now http://bit.ly/1GGYiaC. We now support data on 32 countries and 95 stock markets.
    22 Mar, 12:41 PM Reply Like
  • Serenity
    , contributor
    Comments (677) | Send Message
     
    Benjamin Graham - also known as The Dean of Wall Street - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

     

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).

     

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 rules for finding them.
    For advanced investors, Graham described various "special situations".

     

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of experience, intuition and talent. Such stocks are not amenable to impartial quantitative analysis, and require a case-specific approach.

     

    Serenity's screeners thus focus on Defensive, Enterprising and NCAV stocks. These can be reliably detected by today's data-mining software, and offer a great avenue for detailed objective analysis and profitable investment.

     

    Serenity provides two web-based screeners:
    1. A free Classic Graham screener that lets you screen 5000+ NYSE and NASDAQ stocks by a strict 17-point Benjamin Graham Value Investing assessment.
    2. An Advanced Graham screener (more customizable) that lets you screen the same 5000+ stocks by customized combinations of the Graham Number and Graham's 15 other Value Investing rules.

     

    Thank you.
    30 Mar, 04:04 PM Reply Like
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