Getting most out of Filter tool - Stock Screener |
Wondering how to Use Filter tool effectively ? Please refer to following: Firstly we should decide what kind of companies we want to analyze.Investors may want to invest in following types of companies: 1.Fast Growers 2.Stalwarts 3.Debt Free companies 4.Companies with good Gross profit Margin , OP Margin 5.Companies with good Return on Equity etc.. So if you are looking for Fast Growers , you may select revenue growth and Operating Growth > 20%.You may consider varied number of years.For e.g if we select number of years as 3 then it will give you list of companies which have been growing at more than 20% for last 3 years.Below screen shows how to do it: Great Companies usually have good return on equity , good return on assets , debt to equity ratio very less.When ROE and ROA are very close to each other then it means that a company is using very less leverage for its growth/Opeations. For e.g if you search with below parameters , you will get good companies.Most of below companies have performed well in last 5 years in terms of business expansion as well have given good returns to investors We can use these parameters in number of ways to get various types of companies but we should keep in mind that companies which consistently show good GP margin more than 40% , Return on Assets and Return on equity more than 25% , debt/equity less than .5% then the company is proabably having some sort of competitive advantage working in its favour and this company is more likely to give good returns to its investors in long run. Still lot of work needs to be done before we decide to invest in the company but with the help of Stock Screener - Filter Tool we can identify the companies which can be considered for further analysis. |