Investing and Stock Screening

How Do Stock Screening Apps Work?

Since it’s not 1970, you no longer have to watch the news or read the paper to get the most up-to-date information about the economy or the stock market. You also don’t have to go to your local brokerage to check into the price or financials of a particular stock, or even to purchase shares of said equity. Everything can be done from anywhere, and at any time, thanks to the internet and all the beautiful concepts it has brought to fruition.

Screening your stocks is no exception, with many applications for both desktops and mobile devices being introduced to us in recent years that allow investors to both buy and research any particular tradeable asset on the market. It can be a bit complex, though—that’s just how advanced and useful they are—so here’s how a stock screening app works.

What Are Stock Screening Apps?

Simply put, stock screening apps compile relevant data and financial metrics about a company or publicly traded asset and its public shares in order to help investors filter through information important to them that meets their criteria, thus facilitating sound and educated financial decisions. They’re essentially a secondary middle-man in the equation wherein investors are on one side, and businesses and brokerages are on the other.

Gain Industry Expert Insight On Your Investments

Stock Screening Apps Working

In order to purchase shares of a stock, investors must go through a brokerage that purchases the holdings on their behalf. Very rarely will a person have shares of a company otherwise, with the case usually being that they’re an employee or an employee having been given equity in the company.

Brokerages can give you advice on what to invest in, and in a sense, that’s what they’re there for, but in 2020, do you really need one if you’ve got a good stock screening app? Access to a brokerage can be had from anywhere nowadays, and many brokerage platforms and applications have their own screening solutions built into their app offering as well. Because of this, the exclusivity that brokerages used to hold onto as their advantage is slipping away. While many high-level investors and individual accounts alone do work with brokers and advisors to make their investments, the idea of a brokerage being privy to information you don’t also have access to is no more.

Modern online banking and investing allow you, the investor, access to broker-level insights through tools such as your stock screening app. The app of your choice will likely include tens and tens of metrics available for you to utilize when making your investment decision. This can be a lot to sort through, and it’s important to first do other outside research to determine what numbers are considered important by licensed investors, as well as which ones matter most to you personally.

The Numbers

You can use numbers such as the valuable price-to-earnings ratio to check out a company’s market performance relative to their revenue, use the debt-to-equity ratio to check on how a business is doing in terms of not only its liabilities but whether its equity is level with those liabilities. Look at simple statistics like the day’s high or today’s low price, the market cap of the investment, volume, and even setting a target price notification is an option on most stock screening platforms.

What statistics are important to you depends upon your unique investment outlook. A 25-year-old investor may be okay with adding more risk to their portfolio, and therefore not be so concerned with a stock with a not-so-great P/E ratio if the prospects for growth are there. Contrast this with someone nearing retirement, or perhaps even a young investor looking for a long-term type of holding that provides steady growth: in this case, that number or others may matter much more to them. It’s all up to the investor, and stock screening apps allow you to make it personalized for you.

Sorting through all of the data and information that’s important to you and your investment strategy is a key component of making sound investments, but also feeling confident about them regardless of the outcome, knowing you’ve made a knowledgeable decision. The ease with which these measurements and judgments can be made, just because of how convenient it is to check on them with a stock screening app, makes fundamental solid investing that much simpler for everyone.

Which To Choose?

There’s no perfect app for everyone, and many are even very similar. The best method for determining the one right for you is simply to try out as many as needed to find which one suits your style and needs best.

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