Do investors need to take advantage of using a stock screening tool? Some say yes, and some say no. Each investor has different goals and plans for their portfolio. Let’s say that you just want to buy and hold five stocks. You might think that it’s not a good idea to use a screener. Whether you use a paid stock scanning tools is up to you, but to be sure, the information generated would be of big help.
Furthermore, even buy and hold investors tend to have to change positions from time to time, at least on a security or two. Warren Buffet consistently exits positions over time, and he also enters new positions. Mutual funds publish their holdings, which are changing gradually over time. Additionally, the five stock buy and hold portfolio serves as a foundation for the best case scenario in which an investor might decide against using a stock screening tool.
In other words, the stock scanner would still be useful in that regard. And so you can imagine it would even be more useful to someone entering and exiting trades more often, whether swing trading or day trading. You can generate all kinds of reports that can help you get a closer look at company data. You want to especially pay attention to sales.
All the data is important, but there sales growth is a big factor. You can find sales growth in a company that is selling at a discount. You want to pay attention to the P/E ratios, too, as well as EPS or earnings per share. There’s so much data that you can compile on the companies that you know, and you can find companies you don’t know about, too.
If you were to start using a stock screening tool, you would see that they are advantageous in many ways. I have not yet personally used one, but I have been privy to the data from an investor friend of mine who uses a paid tool. The site generates very detailed reports on companies and the forecasts for them moving forward.
There are all different kinds of stock scanning tools out there. You’re going to see that when you take a look at what’s available. If you decide to use one, I hope it helps to make a big difference in how you set up your portfolio moving forward. There are all kinds of ways in which a stock screening tool can help you.