Business

How to Set Up a Stock Screener for Value Investing

April 2, 2025
Luis Bollin

A stocks screener is an invaluable tool for value investors looking to identify undervalued stocks with strong fundamentals. By setting up the right screening criteria, investors can filter out companies trading below their intrinsic value. Additionally, using a systematic investment calculator can help plan long-term investments and assess potential returns. In this guide, we’ll walk you through the steps to setting up a stock screener for value investing.

1. Define Your Value Investing Criteria

Value investors look for companies that are financially strong but undervalued by the market. Key parameters include:

  • Price-to-Earnings (P/E) Ratio – Lower than industry average, indicating undervaluation.

  • Price-to-Book (P/B) Ratio – Less than 1.5 suggests a stock is trading below its book value.

  • Earnings Growth – Positive growth over the past 5-10 years.

  • Debt-to-Equity Ratio – Lower debt relative to equity signals financial stability.

  • Return on Equity (ROE) – Consistently above 15% reflects strong management efficiency.

2. Selecting the Right Stock Screener

Here are some of the best stock screeners for value investing:

  • Finviz – Offers fundamental filters and valuation metrics.

  • Yahoo Finance Screener – Provides detailed financial ratios.

  • StockEdge – Ideal for Indian markets with fundamental analysis tools.

  • TradingView – Customizable filters for in-depth screening.

3. Setting Up Your Screener

Configure your stock screener with the following filters:

  • P/E Ratio: Less than 15 (or lower than the sector average).

  • P/B Ratio: Below 1.5.

  • Debt-to-Equity Ratio: Less than 0.5.

  • Earnings Growth (5-Year): Positive and consistent.

  • ROE: Above 15%.

4. Analyzing the Results

Once the screener generates a list of stocks, analyze them further by:

  • Checking financial statements for revenue consistency.

  • Reviewing recent earnings reports and management discussions.

  • Assessing industry trends and economic conditions.

Final Thoughts

A well-configured stocks screener simplifies the process of identifying value stocks that offer strong long-term potential. When combined with a systematic investment calculator, investors can better plan their portfolio and optimize returns over time. By following a disciplined approach, value investors can capitalize on market inefficiencies and uncover hidden gems.