Stock Price Forecasting Using Finviz Stock Screener

Predicting the future of stock prices is the holy grail of investing. While no method guarantees accuracy, combining fundamental and technical analysis can significantly improve your odds. One powerful, free tool that can aid in this process is the Finviz stock screener. This blog post will explore how to leverage Finviz to identify potential investment opportunities and inform your stock price forecasts. We'll focus on using its screening capabilities to narrow down your search and then diving deeper into the data Finviz provides to assess a stock's potential.

Finviz offers a comprehensive suite of tools, from real-time quotes and charts to news and insider trading information. However, its stock screener is arguably its most valuable feature for identifying stocks that meet specific criteria. By filtering stocks based on various fundamental and technical indicators, you can quickly identify potential candidates for further analysis and, ultimately, informed stock price forecasting.

This guide will walk you through using the Finviz stock screener to identify promising stocks and then show you how to use the information provided by Finviz to build a foundation for your own price forecasts.

Step 1: Accessing the Finviz Stock Screener

First, navigate to the Finviz website (finviz.com). Click on the "Screener" tab in the top navigation bar. This will take you to the stock screener interface. You'll see three main tabs: "Descriptive," "Fundamental," and "Technical." These tabs allow you to filter stocks based on different criteria.

Step 2: Defining Your Screening Criteria

This is where the magic happens. The key to effective screening is to define clear, specific criteria that align with your investment strategy. Let's explore some examples:

  • Growth Investing: If you're looking for growth stocks, you might focus on companies with high revenue growth, earnings per share (EPS) growth, and price-to-earnings (P/E) ratios that suggest future potential.
    • Fundamental Tab: Set criteria like "EPS Growth Next 5 Years" to "Positive High," "Revenue Growth Past 5 Years" to "Positive High," and "P/E Ratio" to a reasonable range (e.g., between 15 and 30).
  • Value Investing: Value investors seek undervalued companies. You might look for stocks with low P/E ratios, price-to-book (P/B) ratios, and price-to-sales (P/S) ratios.
    • Fundamental Tab: Set criteria like "P/E Ratio" to "Under 15," "P/B Ratio" to "Under 2," and "P/S Ratio" to "Under 1."
  • Dividend Investing: If you're interested in dividend stocks, you'll want to filter for companies with a high dividend yield and a history of consistent dividend payments.
    • Fundamental Tab: Set "Dividend Yield" to a desired percentage range (e.g., "Over 3%") and consider adding criteria related to payout ratio to ensure dividend sustainability.
  • Technical Analysis: If you rely on technical indicators, you can filter for stocks based on moving averages, relative strength index (RSI), and other technical metrics.
    • Technical Tab: Set criteria like "SMA20" (20-day Simple Moving Average) "Price above SMA20" or "RSI (14)" within a specific range (e.g., "Overbought" or "Oversold").

Important Considerations:

  • Industry: You can also filter by industry to focus on sectors you believe are poised for growth.
  • Market Cap: Consider the market capitalization of the companies you're screening. Large-cap stocks tend to be more stable, while small-cap stocks offer higher growth potential but also carry more risk.
  • Combining Criteria: The power of Finviz lies in its ability to combine multiple criteria. For example, you could screen for stocks with high revenue growth and a low P/E ratio.

Step 3: Analyzing the Results

Once you've defined your screening criteria, Finviz will display a list of stocks that meet those requirements. Don't stop there! This is just the starting point. Click on each stock symbol to access its individual stock page. This page provides a wealth of information that you can use to further analyze the company.

Here's a breakdown of the key information you'll find on the stock page and how it can inform your stock price forecasts:

  • Overview: This section provides basic information about the company, including its industry, sector, and market capitalization.
  • Financials: This section contains key financial ratios and metrics, such as revenue, earnings, debt, and cash flow. Analyze these figures to assess the company's financial health and profitability. Look for trends in revenue and earnings growth. A company consistently increasing revenue and earnings is generally a positive sign.
  • News: Stay informed about the latest news and developments related to the company. Positive news (e.g., new product launches, partnerships, earnings beats) can often drive stock prices higher. Negative news (e.g., regulatory issues, earnings misses) can have the opposite effect.
  • Charts: Finviz provides interactive charts that allow you to visualize the stock's price history and technical indicators. Use these charts to identify trends, support and resistance levels, and potential entry and exit points.
  • Insider Trading: Monitor insider trading activity. If company insiders are buying shares, it could be a sign that they believe the stock is undervalued. Conversely, if insiders are selling shares, it could be a warning sign.
  • Analyst Ratings: Pay attention to analyst ratings and price targets. While analyst opinions shouldn't be the sole basis for your investment decisions, they can provide valuable insights.

Step 4: Building Your Stock Price Forecast

After gathering information from Finviz, you can begin to build your stock price forecast. There are several approaches you can take:

  • Fundamental Analysis: Project future revenue and earnings based on historical trends, industry growth rates, and company-specific factors. Then, use valuation multiples (e.g., P/E ratio, P/S ratio) to estimate the stock's fair value.
  • Technical Analysis: Identify key support and resistance levels, trendlines, and chart patterns. Use these to predict potential price movements.
  • Sentiment Analysis: Gauge market sentiment towards the stock. This can be done by monitoring news articles, social media, and analyst reports.

Important Considerations:

  • Economic Factors: Consider the overall economic environment. Economic growth, interest rates, and inflation can all impact stock prices.
  • Industry Trends: Analyze industry trends and competitive dynamics. A company's stock price can be affected by changes in its industry.
  • Company-Specific Events: Be aware of upcoming company-specific events, such as earnings announcements, product launches, and mergers or acquisitions.

Step 5: Refining Your Forecast and Monitoring Your Investments

Stock price forecasting is an ongoing process. As new information becomes available, you'll need to refine your forecast and adjust your investment strategy accordingly.

  • Regularly Review: Regularly review your investments and track their performance.
  • Stay Informed: Stay informed about the latest news and developments related to the companies you're invested in.
  • Be Flexible: Be prepared to adjust your forecast and your investment strategy as needed.

Conclusion: Empowering Your Investment Decisions with Finviz

Finviz is a powerful, free tool that can help you identify potential investment opportunities and inform your stock price forecasts. By leveraging its screening capabilities and analyzing the data it provides, you can make more informed investment decisions. Remember that no method guarantees success, and it's crucial to conduct thorough research and due diligence before investing in any stock. Use Finviz as a starting point, combine it with other research tools and your own analysis, and always invest responsibly. The key is to use the information to create a well-reasoned investment strategy and stick to it. Happy investing!