How to use Screener to find undervalued stocks?

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Short Answer

Screener offers a set of pre-existing filters or screens which you can use to filter stocks. It also provides the feature to create your own screen to filter out stocks with your own defined parameters. Using both of these features you can find undervalued stocks by adding certain parameters such as PE, RoCE, etc

Detailed Answer

What is Screener?

Screener is a stock filtering and fundamental analysis tool that enables investors and traders to find the best stocks for investment as well as trading purposes. You can use Screener to filter any stock from the Indian markets.

How to use Screener?

Screener provides you with two different sets of features. The platform has many pre-existing filters and screeners that can be used to find stocks. These filters contain numerous parameters within them that can be used to obtain the best-suited stocks.

In the next part, you can develop your own screener/filter using which you can screen stocks. You can use any number of parameters and filters to find out the stocks that match your parameters. There are also some other tools available on the platform that can be used to get better results.

To make your own Screen, you don’t need to know coding or any other programming language. You can simply search and select your required parameters from the drop-down menu and add the numerical values, based on which you want to find the stocks.

How to use Screener to find Undervalued stocks?

To find undervalued stocks there are two methods that you can follow. In the first place, you can select the existing screens on Screener. The second method is to make your own screen by using the necessary parameters to filter out the best stocks that fulfill the given criteria.

1. Existing screens:

Screener has numerous types of screeners that can help you to find undervalued stocks. Some of the screeners are:

  • High Growth High RoE and low PE.
  • Value stocks
  • Peter Lynch Stock Screener
  • Benjamin Gram and Warren Buffet screener

These are some of the screens that are already present for you to use. You can use these filters to shortlist a list of undervalued stocks.

2. Creating your own screener:

To find undervalued stocks, you can create your own screener in ‘Create New Screen’ icon. Some of the metrics that you have to use are.

  • Low Price to Earnings (PE), less than 15
  • High Growth, more than
  • Return on Capital employed (ROCE) more than 22%
  • Low Debt to Equity, less than 1.

These are some of the metrics that can be used to create your own filter to discover undervalued companies. You can alter the numerical according to your needs to get better results.

Tagged With: Stock ScreenerFundamental AnalysisEquity ResearchStock MarketUndervalued Stocks
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