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Stock Screen Dream Team


Stock screeners are priceless time-saving devices, able to identify diamonds in the rough; however, they are far from infallible and should really be used as only one aspect in a stock picker's arsenal.

MINYANVILLE ORIGINAL Just as the satellite technology available in today's average automobile dwarfs what the world's mightiest armies could call upon until relatively recently, the armchair investor can now easily access the sort of sophisticated stock selection tools that were once the sole preserve of large institutions.

Shifting through over 17,000 public US companies was once indescribably daunting, invariably involving a schlep to the local library to pour over ink-stained business sections before tearing your hair out attempting to analyze S&P tear sheets. All this can now be completed with one mouse click. Powered by ever more sophisticated algorithms, electronic stock screeners help the "do it yourself" trader build portfolios from among a dizzying number of options.

Plug in popular parameters such as price-to-earnings ratio or dividend growth rate, customize your settings from among umpteen different variables, and voilà -- endless money making ideas automatically appear. If it all sounds a bit mechanical, consider that a study earlier this year showed an astonishing 84% of actively managed mutual funds underperform the overall market, and even wily old Warren Buffett has now failed to beat the S&P 500 Index (INDEXSP:.INX) for three years running.

Whether your investment preference is for fundamental or technical, top down or bottom up, there is likely a scanner to fit your needs. This article looks at some of the more widely used offerings from a wide array of choices. Which ones pass the screen test?

1. Yahoo Finance

This venerable free product, part of the largest US Web portal, arrived on the scene in the booming bull market of the late 1990s. The solid, if unspectacular, site is available in both Java and HTML formats and provides several pre-set parameters. Among these are screens that splice and dice data according to "Largest Market Cap" and "Greatest Sales Revenue." More customized tools can also be created and saved after a quick registration. Strengths include a comparative wealth of technical criteria, the ability to easily export saved searches to Excel, and the ability to access market-moving news on a selected stock simply by clicking on its relevant symbol.

On balance, it represents a good starting screen, although a relatively rudimentary cookie-cutter look and the absence of search fields such as free cash flow yields might turn off more seasoned investors.

2. Google Finance

This is another complimentary screener that it is comparable to, if slightly more general than, the screener offered by Yahoo. It is refreshingly simple, user-friendly, and well-suited to working on a variety of tablet devices. Approximately 60 different filters can be accessed, and I especially liked the sliding scale that can be dragged according to preferred parameters. Among its drawbacks are an absence of pre-set offerings, the inability to save screens for future use, and a lack of spreadsheet-exporting capabilities.

Also missing was a backtesting mechanism, a common complaint of free screeners. (Although of course, as more than one Wall Street wit has remarked, "You can prove anything with backtesting.") Again, Google's tool is perhaps better suited to quick scanning rather than sophisticated in-depth analysis.
No positions in stocks mentioned.
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