A stock screener turns "there are 10,000 stocks" into "here are 14 worth reading about." This tutorial builds one real screen, step by step, using the free tier of stockanalysis.com (a WiseIQ partner — the free version costs nothing and needs no account).
The mindset before the metrics
A screener doesn't find good stocks. It excludes obviously bad fits so your reading time goes further. Every filter below answers one question: "what would make me not even want to read about this company?"
Start with size: market cap over $2B
Micro-caps are where manipulation and delisting risk live. Above $2 billion you're screening companies with real institutional coverage and audited history. You can hunt smaller later; don't start there.
Demand real profits: positive net margin, 3+ years
Filter for net profit margin above 5%. Unprofitable companies can be great investments — but analyzing them is an advanced skill. While learning, only read businesses that demonstrably make money.
Check the balance sheet: debt-to-equity under 1.0
Companies drowning in debt have their future decided by lenders, not customers. D/E under 1.0 filters for businesses that survive a bad year. (Banks and utilities break this rule structurally — exclude those sectors for now.)
Demand growth: revenue up 5%+ annually
Cheap-but-shrinking is the classic value trap. Five percent revenue growth over 3–5 years means the business is at least keeping pace with the economy plus something.
Now — and only now — look at price: P/E under 30
Valuation comes last deliberately. A P/E filter applied first fills your screen with companies that are cheap for a reason. Applied after quality filters, it ranks survivors by price.
What you'll get, and what to do with it
This screen typically returns 10–30 names. The screen's job is done — now the reading starts: latest 10-K, revenue segments, who the competitors are. A screener that returns 500 results taught you nothing; one that returns 15 gave you a syllabus.
Common beginner screening mistakes
- Screening for dividend yield above 6%. Extreme yields usually signal a collapsing share price — the market pricing in a dividend cut.
- Using one magic metric. Low P/E alone finds dying businesses; high growth alone finds unprofitable ones. Filters work as a system.
- Rebuilding the screen weekly. Pick criteria, save the screen, re-run monthly. Churning criteria is entertainment, not research.