How To Set Up Finviz Stock Screener For Best Results

Finviz.com is a powerful, free stock screener that can help you identify potential investment opportunities based on your specific criteria. Whether you're a seasoned trader or just starting out, understanding how to effectively use the Finviz screener can significantly improve your stock selection process. However, with its vast array of filters, it can also feel overwhelming. This guide will walk you through the key steps to setting up Finviz for optimal results, allowing you to quickly and efficiently find stocks that align with your investment strategy.

We'll break down the different filter categories, explain how to combine them, and offer tips on refining your searches to avoid information overload and pinpoint the most promising candidates. Get ready to unlock the full potential of Finviz and take your stock screening to the next level.

1. Understanding the Finviz Interface

Before diving into the filters, let's get familiar with the Finviz screener interface. Navigate to Finviz.com and click on the "Screener" tab. You'll see three main tabs:

  • Descriptive: This tab focuses on basic company information like market capitalization, sector, industry, and country.
  • Fundamental: This is where you'll find filters based on financial ratios, profitability, debt levels, and other fundamental metrics. This is crucial for fundamental analysis.
  • Technical: This tab provides filters based on technical indicators, chart patterns, and price performance. This is essential for technical analysis.

Understanding these tabs is the first step to building effective screens. You can also save your custom screens for later use.

2. Defining Your Investment Strategy

Before you start clicking filters, it's crucial to define your investment strategy. Are you looking for value stocks, growth stocks, dividend stocks, or something else entirely? Knowing your objectives will guide your filter choices and prevent you from wasting time on irrelevant stocks.

Consider these questions:

  • What is your risk tolerance? Are you comfortable with volatile stocks or do you prefer more stable investments?
  • What is your investment horizon? Are you looking for short-term gains or long-term growth?
  • What are your key performance indicators (KPIs)? What metrics are most important to you when evaluating a company?

Answering these questions will help you narrow down the relevant filters. For example, if you're a value investor, you might focus on filters like P/E ratio, Price/Book ratio, and Debt/Equity ratio. If you are looking for stocks in the healthcare sector, you can specify this under the "Descriptive" tab.

3. Mastering the Descriptive Filters

The "Descriptive" tab is a great starting point for narrowing down your search based on basic company characteristics. Here are some key filters to consider:

  • Market Cap: This filter allows you to target companies of a specific size, from nano-cap to mega-cap. Choose a market cap range that aligns with your risk tolerance and investment goals. Smaller companies can offer higher growth potential but also come with greater risk.
  • Sector & Industry: These filters allow you to focus on specific sectors or industries that you believe are poised for growth. For example, you might target the technology sector or the renewable energy industry.
  • Country: If you're interested in international stocks, you can use this filter to limit your search to specific countries.
  • Exchange: This filter lets you choose which stock exchanges to include in your search.

Example: If you're looking for large-cap technology companies in the United States, you would set the Market Cap filter to "Large ($10B to $200B)", the Sector filter to "Technology", and the Country filter to "USA".

4. Diving into Fundamental Filters

The "Fundamental" tab is where you can apply filters based on financial ratios and other fundamental metrics. This is essential for identifying undervalued or high-quality companies. Here are some important filters to consider:

  • P/E Ratio (Price-to-Earnings): This ratio compares a company's stock price to its earnings per share. A low P/E ratio may indicate that a stock is undervalued.
  • EPS Growth (Earnings Per Share Growth): This filter allows you to target companies with strong earnings growth. Look for companies with consistent and sustainable EPS growth.
  • Debt/Equity Ratio: This ratio measures a company's leverage. A high Debt/Equity ratio may indicate that a company is overleveraged and at risk of financial distress.
  • Dividend Yield: If you're looking for income-generating stocks, this filter allows you to target companies with high dividend yields.
  • Return on Equity (ROE): This ratio measures a company's profitability relative to its shareholders' equity. A high ROE indicates that a company is effectively using its capital to generate profits.

Example: If you're looking for value stocks, you might set the P/E Ratio filter to "Under 15" and the Debt/Equity Ratio filter to "Under 1".

5. Leveraging Technical Filters

The "Technical" tab allows you to apply filters based on technical indicators and chart patterns. This is useful for identifying stocks that are exhibiting specific price trends or momentum. Here are some key filters to consider:

  • Price: This filter allows you to target stocks within a specific price range.
  • Change: This filter shows the percentage change in price over a specific period (e.g., 1 Week, 1 Month, 3 Months).
  • Volume: This filter allows you to target stocks with high trading volume. High volume can indicate strong interest in a stock.
  • SMA20 (20-day Simple Moving Average): This filter allows you to find stocks trading above or below their 20-day moving average.
  • RSI (Relative Strength Index): This filter measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock.

Example: If you're looking for stocks with strong momentum, you might set the Change (1 Month) filter to "Over 10%" and the RSI (14) filter to "Overbought".

6. Combining Filters for Powerful Results

The real power of the Finviz screener comes from combining multiple filters to create highly specific searches. By layering filters, you can narrow down a large universe of stocks to a small, manageable list of potential candidates.

Example: Let's say you're looking for small-cap growth stocks with strong earnings growth and low debt. You might combine the following filters:

  • Market Cap: "Small ($300M to $2B)"
  • EPS Growth (Q/Q): "Over 20%"
  • Debt/Equity Ratio: "Under 0.5"

This combination of filters will identify small-cap companies with strong recent earnings growth and relatively low debt levels.

7. Refining Your Search and Avoiding Information Overload

Even with carefully chosen filters, you may still end up with a large number of results. Here are some tips for refining your search and avoiding information overload:

  • Start with broad filters and gradually narrow down your search. Don't try to apply too many filters at once.
  • Experiment with different filter combinations. See how different combinations of filters affect your results.
  • Use the "Signal" filter to identify stocks with specific chart patterns or news events. This can help you quickly identify stocks that are exhibiting unusual activity.
  • Review the results carefully. Don't just blindly invest in the first stock on the list. Take the time to research each company and understand its business model, financial performance, and competitive landscape.
  • Save your favorite screens. This will allow you to quickly run the same search again in the future.

8. Beyond the Screener: Due Diligence

The Finviz stock screener is a fantastic tool for generating ideas, but it's crucial to remember that it's just a starting point. Never invest in a stock based solely on the results of a screen. Always conduct thorough due diligence before making any investment decisions. This includes:

  • Reading the company's financial statements (10-K and 10-Q reports).
  • Researching the company's business model and competitive landscape.
  • Reading news articles and analyst reports about the company.
  • Understanding the risks associated with investing in the stock.

By combining the power of the Finviz screener with thorough due diligence, you can significantly increase your chances of finding profitable investment opportunities.

Final Thoughts

Mastering the Finviz stock screener can be a game-changer for your investment strategy. By understanding the different filter categories, defining your investment objectives, and combining filters effectively, you can quickly and efficiently identify stocks that align with your goals. Remember to always conduct thorough due diligence before making any investment decisions. Happy screening!