Searching for new stock ideas doesn’t have to be complicated and time-consuming. You just need to use the right tools. Today, we’ll take you through the top five free stock screeners that will provide you with the information you need to make good trading decisions.

Screeners are great for finding your own stocks. If you prefer to have someone else do the research for you, you could sign up for a research service like Motley Fool (This Motley Fool review explains some of the pros and cons). Today, we will be focused specifically on screeners for traders who want to find their own stocks to trade.

The list of free stock screeners we will show you today is based on the following criteria:

• Ease of use
• Number and range of filters offered
• Filter criteria depth and quality
• Additional functionalities

5. MarketWatch

MarketWatch screener is a very basic stock screener. What we like about it is the interface which is very clean and easy to use. MarketWatch offers a limited number of fundamental and technical filters. Even though the selection of filters is very limited, they are all very high quality. They will allow you to do various stock scans according to your needs and build a targeted watch list.

In conclusion, this tool might not be useful to a professional investor looking for advanced functions, but it’s a great, simple tool for beginners that allows you to perform reliable stock scans.

4. Morningstar

Morningstar is also a free stock screener with basic functions. It stands out among other stock screeners because it uses its own proprietary rating system. It allows you to narrow the search results based on three Morningstar’s ratings. The three ratings are growth grade, profitability grade, and financial health grade and they are all rated on a scale from A to F.

When you go to the Morningstar website, you’ll need to create a free basic account and you can start scanning. The results of the scan will be displayed in a new window once you choose your criteria. This can be slightly inconvenient since you have to go back to the previous page in order to adjust your criteria and run a new scan. Overall. Morningstar is a basic screener but does offer several useful criteria that are rarely found in free stock screeners.

3. Yahoo Finance

Yahoo Finance offers a free HTML stock screener that runs in your browser window. The free version lets users fine-tune their searches with a limited number of criteria. You’ll get used to the interface quickly, and there are even a couple of preset screenings to help you get an idea about how it all works and develop your own strategy.

One good thing about this stock screener is that you can click on any ticker to be taken to the corresponding page on Yahoo Finance. You can also save your results for later use which is very useful.

2. Google Finance

Google offers a free stock screener as part of Google Finance. What makes it stand out is the visually pleasing and easy to use interface. It’s great for beginners because learning how to use it is really easy, even for beginners. Furthermore, speed will never be a problem because the results show up almost instantly.

The main problem with the Google Finance stock screener is the limited number of filters, with hardly any technical filters offered. Just like with Yahoo Finance, the results can be clicked on in order to access the quote page on Google Finance.

1. FINVIZ.com

The FINVIZ.com stock screener is first on our list because of three important reasons. It offers a wide variety of selection criteria and the interface is very user-friendly. The third reason is the overall functionality of the stock screener, which is very good.

The scan filters offered by FINVIZ include both technical and fundamental filters and the results are generated very quickly. There is also a very convenient feature that makes FINVIZ stand out among other stock screeners – just hover your cursor above any stock ticker and a stock chart for that stock will pop up. FINVIZ allows you to perform in-depth scans with a focus on quality. Overall, it is one of the best stock screeners available today and it will be useful to any investor.

How to know if a stock split is a good thing or not? Will they bring something positive or something negative to the company? On one hand, reverse splits are something people fret about, while regular ones are a reason for cheer. How to know the difference?

Let’s define stock splits for start

When a company takes all of its shares and divides them into less or multiple shares – that’s a stock split. The total money value of that stock won’t change, but the number of shares you have. The total price of that particular stock then becomes higher or lower, depending on the type or magnitude of the split.

Most of the time, the goal of a split is to lower the price of the stock so it becomes more affordable.

So, if you own 100 shares at $10 per share – $1000 dollars, a 2 for 1 split would mean that you now have 200 shares at $5 each.

Stock split types:

1. Standard split

This happens when the price of a stock becomes too steep, and the company wants to make it lower. This is good for the company because it’s a sign that it has been growing. Depending on the situation, the split can be 2 for 1, 10 for 1, or any other combination.

2. Reverse split

This only happens when the stock price of a company is so low that they have to do it in order to get the price back up. This has to be done when share value is under $1. When this happens, the company has to do a reverse split in order to meet listing conditions, so it can remain publicly traded. This can also happen with any magnitude, 1 for 2, 1 for 10, again, depending on the situation in question.

Stock split strategy

It’s rather simple – just steer clear of reverse splits, and look for standard ones. If you own a stock that’s been split twice in the last year, it’s almost guaranteed that its value has also been on the rise.

Tips

*Steer clear of stocks that had a reverse split in the past two years. Even though it might seem like a good investment, there must have been an internal problem that caused the stock to plummet in the past.

*Check each stock to see if there were splits. Some use Yahoo Finance for this, as it’s the simplest tool. Find the date of the last split as well as the magnitude of it. This will paint a nice, quick picture of how that stock performed lately.

Warning

When a valuable stock splits late into a huge run-up, it might be the time to step back and take your profits. If, for example, a stock is on a steady rise for the past 2 years, and it split once 2 for 1 during that period it’s a good sign. But, if that is all of a sudden followed by its price getting doubled, tripled or quadrupled, and the company performs a 5 for 1 split – you might want to walk away. This might mean that that stock is nearing its maximum, and a climax may be near.

In the end

A standard stock split is a good sign, while a reverse split is a bad one. If you check the stock at Yahoo Finance, you’ll find out if you need to invest or steer clear.

But, if you read the signs incorrectly, you stand to lose a lot. That’s why a stock split is both something to hope for and something to fear. It all depends on how acquainted with a stock you are, and how well you can predict its future.

When trying to define growth investing, the easiest way is to compare it to value investing. Value investors try to find stocks which they can trade for less than their intrinsic value. In contrast, growth investors are looking to increase the company’s potential in the future.

In addition, growth investors look for stocks that are trading higher – but they expect the intrinsic value to grow and surpass expectations. Furthermore, one of their main goals is to earn a profit through long-term and short-term capital appreciation.

Capital Gains and Profit

Growth investors try to find new and exciting companies that have a potential to grow. They are not after the dividends. Instead, they expect their investments to advance.

Furthermore, the main idea is to grow their wealth by reaching higher stock prices in the future. Because of that, they typically invest in new technologies and focus on capital gains instead of dividends. In addition, they are usually after the young companies that are expected to succeed in the near future.

What to Focus On?

There isn’t a formula that will help you evaluate the potential for all types of growth stocks. It requires you to trust your judgment and a high level of individual interpretation. Even though there are certain methods that growth investors use, they cannot apply them to all industries.

You would, therefore, have to take into consideration the past performance of a company. In addition to that, you would also have to evaluate the industry’s performance as well. Because there is no “one size fits all” solution, it is vital to have at least a framework for your analysis.

You can trade growth stocks anywhere, but the best ones are usually in the fastest-growing industries. Here are a few factors you should consider and include in your own strategies:

Look for healthy historical growth. Before you select your stocks, make sure that the company has a decent track record. They should have had a steady earnings growth during the last five to ten years. However, bear in mind that the minimum of growth depends on the size of the company. If a company is worth more than $4 billion, look for at least 5%. However, if the value is under $400 million, the growth should be 12%. If they grew in the past years, there is a higher chance of them continuing to prosper.

• Check their forward earnings growth. Companies use an official public statement to announce how much they have profited in a specific period. However, the part you should also be interested in is the earnings estimate. That determines whether or not the company will continue to grow.

• Find strong profit margins. It is essential to evaluate the pretax profit margin before you invest in growth stocks. This metric will allow you to see if the company controls their costs and revenues well. If they exceed their previous five-year average, then they might be an excellent growth candidate.

• Look for a fantastic return on equity. ROE evaluates the profitability, and it reveals how much profit the company is making. If the company’s five-year average ROE stays stable, or it increases, then that company is doing a good job.

• Stable stock performance. If you cannot see the stock doubling in five years, then it probably isn’t material worthy of growth investing. Remember that the price would double at a growth rate of 10% in just seven years. Therefore, if you invest in a young company that has significant growth potential, their stocks must double at a rate of 15% in five years. Although it might seem challenging, this is entirely possible if you pick an excellent up-and-coming company.

If you are a trader, or just have an interest in the stock market, you probably already know what S&P 500 is. However, not many know the history of it. So, if you want to know more, read on.

What is S&P 500

The S&P 500 found its beginnings in 1957 when Standard & Poor’s decided to introduce a market index that will be used to track the value of the largest corporations that were listed on the NY Stock Exchange and the NASDAQ Composite. It represents the composition of the general economy. The exact combination and priorities of certain constituencies changes as it follows the economy. As the time passes, some stocks find their way onto the list, while others fall off.

A lot of people consider this index to be the most important indicator for the US economy. In essence, becoming the bellwether of it. Also, a lot of investors who aim for exposure to the US via index funds will use it. Ever since its beginnings, the performance of S&P 500 has been remarkable. It usually outpaces every other major asset class.

Stock Movement

The steady increase in the price of S&P 500 always went hand-in-hand with the economic growth of the US. Looking into the price movements of S&P 500 will also give you an insight into turbulent periods. You can simply look for price swings. And, the long-term charts will allow you to check emotional highs of investors.

When this index opened in 1957, it was valued at 386.36. However, in the first decade, it came up all the way to 700. However, this was mostly due to the boom following the World War II. And, after that, it was on a steady decline. It took over two decades to rise back up to that level. In fact, from 1969 to 1981, it fell below 300. This period was also not very good for the economy in general. The growth was stagnant while the inflation was very high.

It took some time, but the Federal Reserve found success in reducing the pressure by early eighties. It was done through high interest rates. These rates were one of the bigger contributors to the rising market until the year 2000, when S&P 500 rose by 1,350%.The fact that the inflation rates went down meant that interest rates went down too. That, and other tailwinds helped the bull market a lot. This lead to billions of people all over the world experiencing globalization and entering the middle class.

However, overvaluations, emotional decisions and enthusiasm of the public lead to a creation of a market bubble. Not to mention the amount of speculations regarding high-tech sector as the Internet became popular. As you can imagine, the bubble did burst during the early 2000s. And, while NASDAQ fell to almost only 10% of its value, the S&P 500 fell to 60%. It took it five years to recover and reach new heights. Thanks mostly to the new strength in financial stocks, housing, and commodity stocks.

Unfortunately, a lot of the gains fell back as the housing prices went down. This even lead to debt defaults and ripple effects in the entire financial system. At that time, the general public started avoiding the market in general. The S&P 500 fell to the new bottom by March 2009. However, the year 2009 was a brand new turning point for S&P 500. Much like in the early eighties, it has climbed. Right now, the S&P 500 is at a new all-time high as it rose over 250% since 2009.

When developing a stock-picking strategy, it’s vital to define the type of analysis. There are two types you can choose from: fundamental and technical.

Fundamentalists estimate the intrinsic value of a security, and there are more patience and monitoring involved. In contrast, technicians use indicators and chart patterns to predict future price moves. By using these tools, they can determine which strengths and weakness the stocks have.

Does it work?

Many experts claim that technical analysis does work – if you do it correctly. The idea is to see how the prices move on the market when they’re shaped by external factors. Those can be natural disasters, and even political events. Because of that, the prices are bound to change and show up in the results, and they can only go up or down.

Technical analysts believe that this method works because market prices always reflect certain information. In addition to that, trends influence their movement. Lastly, history tends to repeat itself, so there is a pattern they can follow.

Still, you can analyze the historical market action, but the analysis needs to be high-quality. Furthermore, the investor has to be able to respond to the results. The profitability depends on his abilities and the tools he uses while doing the analysis. Therefore, he must be agile and responsive so that he could make money.

Who can use it?

Anyone with a basic knowledge of price charts can do technical analysis. It’s even better if they use an online or mobile platform. However, it’s not usually the first choice for buy-and-hold investors. They prefer fundamental analysis, whereas active traders depend on the technical one. They aim to take advantage of the fluctuations, no matter if the market is rising or falling.

What are they interested in?

The main difference between the fundamental and technical analysts is the fact that the latter doesn’t care about the intrinsic value. Instead, they look at past data trends. In addition to that, they also do not care about business models or management. Hence, they sometimes make a huge profit by trading companies they know nothing about.

Is this a long-term strategy?

The purpose of this analysis is to benefit from the fluctuations. If a technician sees that his stocks are not doing so well, he will waste no time to exit his position. Usually, they use stop-loss orders to minimize their losses.

Depending on the direction and the information he’s getting, he can either go short or long on a stock.

In contrast, a value investor has to practice patience and wait for improvements on the market.

Supply and Demand

One of the most important concepts regarding this analysis is the movement of supply and demand. It’s shown through support and resistance.

By using these concepts, they can determine points where a trend may chance. It could go both ways – either pause or reverse itself.

Therefore, analysts will know whether or not there will be an opportunity to trade. If the price reaches a certain point (support or resistance), then there are two possible scenarios. Either the price will bounce back, or it will push through and continue advancing.

Whichever the case, investors can place a bet on the direction they think it will go. If they fail to predict it correctly, they can exit their position with a small loss. However, if they’re correct, the move might be substantial.

Tools

They can choose a public domain indicator or a commercially available tool. However, there are four basic types: trend, momentum, volatility, and volume indicators.

In addition to that, they can use a stock chart to monitor the price movement. That way, if the price goes above its 200-day average, they can quickly respond to it.

Also, they can also use a stock screener to search for financial instruments. The stock screener shows data and price patterns, and it’s based on metrics that were defined by its users.

By using this tool, technicians can input conditions which they would like their stocks to have. For example, they could search for strong volume gainers and high average crossovers.