Best Finviz Stock Screener Settings To Find Growth Stocks

Finding promising growth stocks can feel like searching for a needle in a haystack. There are thousands of publicly traded companies, and sifting through them all manually is impossible. That's where stock screeners come in. Finviz is a popular and powerful free stock screener that allows you to filter companies based on a wide range of fundamental and technical criteria. But with so many options, knowing where to start can be overwhelming.

This post will guide you through the best Finviz stock screener settings to identify potential growth stocks, saving you time and helping you focus on companies with the most promising growth characteristics. We'll cover key fundamental and technical filters, providing a practical framework for your growth stock search. Remember that no stock screener is foolproof, and thorough due diligence is always essential before making any investment decisions.

Let's dive in and unlock the power of Finviz to find those hidden growth gems.

Understanding Growth Stock Investing

Before we jump into the Finviz settings, let's briefly define what we're looking for. Growth stocks are companies expected to increase their revenue and earnings at a significantly faster rate than the average company in their industry or the overall market. These companies often reinvest their profits back into the business to fuel further expansion.

Key characteristics of growth stocks include:

  • High Revenue Growth: Consistently increasing sales figures.
  • Earnings Growth: Improving profitability and earnings per share (EPS).
  • Innovation: Developing new products, services, or technologies.
  • Strong Management: Capable leadership with a clear vision.
  • Expanding Market Share: Gaining a larger portion of their target market.

Our Finviz screener will be designed to identify companies exhibiting these characteristics.

Setting Up Your Finviz Screener

To get started, navigate to the Finviz website (finviz.com) and click on the "Screener" tab. You'll be presented with a wide array of filter options. We'll focus on the most relevant ones for growth stock hunting.

1. Descriptive Filters:

These filters help narrow down the universe of stocks based on basic characteristics.

  • Market Cap: Choose "Small," "Mid," or "Large" depending on your risk tolerance. Small-cap and mid-cap stocks often offer higher growth potential but also come with greater volatility. Start with "Small" ($300M to $2B) and "Mid" ($2B to $10B) for growth. You can always adjust later.
  • Industry: Consider narrowing down to industries you understand and believe have strong growth prospects. Examples include technology, healthcare, and renewable energy. If you're unsure, leave this blank to start.
  • Country: Typically, you'll want to stick with "USA" unless you're comfortable investing in international markets.

2. Fundamental Filters:

These filters are crucial for identifying companies with strong underlying financials.

  • EPS Growth Next 5 Years: This is a key metric for growth stocks. Set this to "Over 15%" or even higher, depending on your desired growth rate. This filter estimates the average annual EPS growth rate expected over the next five years.
  • Sales Growth Past 5 Years: Look for companies with a history of strong sales growth. Set this to "Over 10%" or "Over 20%" to identify companies with a proven track record.
  • Return on Equity (ROE): ROE measures how effectively a company is using shareholder equity to generate profits. A high ROE is a good sign. Set this to "Over 15%."
  • Debt/Equity Ratio: While growth companies may take on some debt to fuel expansion, it's important to avoid companies that are overly leveraged. Set this to "Under 1" or "Under 0.5" to filter out companies with excessive debt.
  • Current Ratio: This ratio measures a company's ability to pay its short-term liabilities with its short-term assets. A current ratio above 1 indicates a healthy financial position. Set this to "Over 1."
  • Price/Earnings to Growth (PEG) Ratio: The PEG ratio considers a company's P/E ratio relative to its earnings growth rate. A PEG ratio of 1 or less is generally considered undervalued. Set this to "Under 1.5" or "Under 1." Keep in mind that PEG ratios can vary significantly by industry.

3. Technical Filters:

These filters help identify stocks with positive price momentum and trading activity.

  • Average Volume: Ensure the stock has sufficient liquidity. Set this to "Over 200K" or higher to avoid thinly traded stocks.
  • Price: Set a minimum price to avoid penny stocks, which are often highly speculative. Set this to "Over $5."
  • Performance (Week): A positive short-term performance can indicate increasing investor interest. Set this to "Up 5%" or higher. This is optional, but can help identify stocks with recent positive momentum.
  • Performance (Month): Similar to the weekly performance, a positive monthly performance can further confirm positive momentum. Set this to "Up 10%" or higher. Again, this is optional.
  • Change from Open: Look for stocks that are performing well today. Set this to "Up 2%" or higher. This is a very short-term filter and can be omitted if you prefer.

Example Screener Settings:

Here's a sample set of Finviz screener settings to get you started:

  • Market Cap: Small (+$300M) & Mid (+$2B)
  • EPS Growth Next 5 Years: Over 15%
  • Sales Growth Past 5 Years: Over 10%
  • Return on Equity: Over 15%
  • Debt/Equity: Under 1
  • Current Ratio: Over 1
  • PEG Ratio: Under 1.5
  • Average Volume: Over 200K
  • Price: Over $5

Analyzing the Results

Once you've applied your filters, Finviz will display a list of stocks that meet your criteria. Don't blindly invest in any of these companies. This is just the starting point.

Here's what to do next:

  • Review the Fundamentals: Dig deeper into the company's financial statements. Look at their revenue trends, profit margins, and cash flow.
  • Understand the Business: What does the company do? What are its competitive advantages? What are the risks?
  • Assess the Management Team: Who are the key executives? What is their track record?
  • Read Analyst Reports: See what analysts are saying about the company's prospects.
  • Check News and Sentiment: Stay informed about any relevant news or events that could impact the company.

Important Considerations

  • No Screener is Perfect: Finviz is a powerful tool, but it's not a magic bullet. It's essential to conduct your own thorough research before investing in any stock.
  • Adjust Your Filters: Don't be afraid to experiment with different filter settings to find the stocks that best fit your investment strategy.
  • Be Patient: Finding promising growth stocks takes time and effort. Don't get discouraged if you don't find anything right away.
  • Consider Sector Diversification: Avoid concentrating your investments in a single sector.
  • Manage Your Risk: Growth stocks can be volatile. Be prepared to ride out the ups and downs.

Conclusion

Using Finviz effectively can significantly improve your chances of finding promising growth stocks. By focusing on key fundamental and technical indicators, you can narrow down the vast universe of publicly traded companies and identify those with the greatest potential for future growth. Remember to always conduct thorough due diligence and manage your risk appropriately. Happy hunting!