Glossary

Stock screener

A tool that filters thousands of stocks down to the few that meet your rules.

A stock screener applies conditions, such as a minimum company size, a sector, a growth rate or a valuation range, to a whole market at once and returns the companies that pass.

A screen is only as good as its rules. Rules on a single number are easy to fool: a low price-to-earnings ratio can mean a bargain or a business in decline. Screens that combine several measures of the business, ranked against similar companies, are harder to fool.

A screen is a starting list for your own research, not a list of things to buy.

  • Fundamental analysis: Judging a company by its business (sales, profits, cash, debt) rather than by its share-price chart.
  • Value trap: A stock that looks cheap but stays cheap, or gets cheaper, because the business is declining.

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