Web-Based Stock Screening Services
The particular characteristics that investors seek vary depending upon individual investment philosophy, risk tolerances, and even timeframe. A value investor may look for financially sound, large-cap stocks with price-earnings ratios below 70% of all other stocks, exhibiting solid expected growth rates and that have seen expected earnings recently revised upward. On the other hand, a growth or momentum investor may seek out smaller stocks with strong earnings growth and increasing price momentum.
Beyond identifying potential investment opportunities, screening systems are also surrounded by company and industry data that serve as a framework to investigate any investment tips or ideas that come your way in an organized, consistent fashion.
In this product comparison, we examine a wide range of free and fee-based on-line stock screening and analysis tools. The comparison grid lists information about subscription costs, program features, and basic database content. Table 1 details the financial statement elements—provided from the income statement, balance sheet, and statement of cash flows—that are found on each service. Individual ratings and system strengths and weaknesses are disclosed in Table 2. Reviews of each on-line screening service begin about halfway down this page.
|Comparing Screening Services|
In today’s market there are very few stand-alone, disk-based fundamental stock screening programs for individual investors. This reflects a trend that has been underway for the past several years as the Web has become more popular. While disk-based applications are more flexible and powerful than their Internet counterparts, Web-based tools have matured to the point that a number of them offer a strong combination of screening features.
Before considering a screening system, it is important that you are comfortable with your investment approach and fully understand its risk level and its required time commitment. For example, growth-oriented approaches are more aggressive and require current data with frequent and close monitoring. The screening systems assembled for this comparison vary widely in their emphasis. When comparing stock screening services, consider the following critical factors:
- the price of the services,
- the universe of stocks supported by the database,
- the depth of stock information,
- the flexibility of the screening tool,
- ease of use, and
- computer system support.
Most of the services reviewed here are still free, although there is a trend toward instituting fee-based options as consolidation among data providers increases the cost of data. In addition, fee-based services typically offer unique elements to justify the cost and attract subscribers. For example, MarketScreen.com emphasizes intraday screening on technical factors, while Validea.com tests the methodologies of several well-known investment gurus.
|Key to Abbreviations in Comparison Grid|
debt/eq = debt to equity It debt/cap = long-term debt to capital
lt debt/eq = long-term debt to equity
liab/cap = liabilities to capital
GM = gross margin
NM = net margin
OM = operating margin
PM = profit margin
ROA = return on assets
ROE = return on equity
ROI = return on investment
P/E = price-earnings ratio
P/B = price-to-book-value ratio
P/S = price-to-sales ratio
P/CF = price-to-cash-flow ratio
P/FCF = price-to-free-cash-flow ratio
Screening dictates that the search process begin with a broad universe of companies. Better screening systems cover a wide range of companies. Some offer substantial coverage that includes NASDAQ National Market and Small Cap companies. Some services also cover NASDAQ Bulletin Board companies, which may be an important consideration if you follow micro-cap companies.
Screening systems offer one of the easiest ways to gather data on smaller firms. Information on the number of companies tracked by each service is provided in the comparison grid.
Depth of Company Information
Screening services vary in the depth of information provided. Some services, such as Investors.com by Investor’s Business Daily and Validea.com, provide fewer data items for each company and instead depend on summary statistics such as ratings and rankings when providing background data on individual companies. Other services, such as Reuters Investor and MSN Money, provide both summary statistics and the raw data behind these numbers.
In considering a data service, look not only at the number of variables but also specifically at which statistics are provided. Investors.com, Morningstar.com, Validea.com, and Value Line have proprietary ratings for company growth, profitability, financial health, and valuation, which may be more important for some investors than the depth or completeness of the database. The majority of services highlighted here primarily offer fundamental data for analysis and screening. The Business Week Online screening engine, which is based on the old Wall Street City screening engine, offers both technical and fundamental factors for screening, while MarketScreen.com is primarily focused on intraday technical factors.
Custom Data Fields
Custom data fields are ratios or figures you create on your own. Custom fields allow you to create ratios omitted by the program developers or enter valuation models that attempt to determine a fair market price for a stock. Once a user-defined variable is created, you can integrate it into your screening. This feature is more critical if your analysis tends to be specialized or specific. It also is fairly rare among Web-based services, although MSN Money and Reuters PowerScreener Lite and 3.0 offer custom fields.
Company information consists of basic data such as the company’s Web address and phone number, so you can request financial statements or speak to the investor relations department for clarification. Basic company descriptions are also common.
Other elements covered include dividend reinvestment plan (DRP) information and industry grouping.
Estimates & Recommendations
The market is driven by expectations, including expectations of future earnings and earnings growth. Display of consensus earnings estimates and buy/hold/sell recommendations are now common, while some services are trying to differentiate themselves with proprietary ratings and valuations.
Consensus estimates are calculated by polling thousands of analysts for earnings estimates of the companies they cover. Services also poll analysts to report their ratings on the overall attractiveness of stocks in an attempt to derive uniform consensus recommendations. These estimates and recommendations allow investors to directly gauge the expectations built into the stock price.
While the objectivity of sell-side analysts has come into question in recent years, changes to recommendations and earnings estimates continue to move stock prices. Look for an indication of recent revisions or an earnings surprise, which may impact share price in the near future or, as research has shown, even for as much as a year.
Valuations try to measure the price attractiveness of a given stock. Some services provide numerical valuation ratings, while others provide price targets based on models or consensus price targets from analysts. When using valuations, it is important to look beyond the actual valuation and determine the assumptions, rationale, and reasonableness behind the company’s rating or “fair price.” Some systems are qualitative, while others are quantitative in their approach. When available, the source of the valuation is listed. The comparison grid indicates if a service provides a fundamental or technical rating/valuation. Since risk works in tandem with return, the valuation segment of the comparison also indicates if a risk rating or ranking measure is provided.
Ratios help you summarize financial statement data into a format that can be easily manipulated to compare year-to-year changes for a company, compare one company against another, or compare a company against its sector or industry. Leverage ratios examine the company’s use of debt in its financial structure. Effective use of debt can enhance shareholder profitability. However, it also increases the risk of saddling the company with an interest payment that must be made both in good times and bad. Common leverage ratios include debt to equity, liabilities as a percentage of assets, and long-term debt as a percentage of capital.
Liquidity ratios try to gauge a firm’s ability to meet its short-term obligations. While liquidity measures are of greater interest to creditors than equity investors, you may want to glance at these ratios if you are looking for high-yielding stocks, as they provide an indication of a company’s ability to sustain or increase its dividend payments. Typical liquidity ratios include the quick ratio and current ratio.
Profitability ratios benchmark company performance and highlight trends when examined over time, as well as indicate strong and weak performance when compared to other firms, or against sector or industry norms. Common profitability ratios include return on assets (ROA), return on equity (ROE), return on investment (invested capital) (ROI), gross margin, operating margin, and net profit margin. Multiples form the cornerstone of many fundamental screens. They relate the current stock price to a tangible company item such as earnings, sales, or book value per share. Multiples provide an indication of how the market values the company’s future prospects. Companies with brighter futures typically trade with higher multiples, but it is important to perform a complete company analysis. Look for a broad range of multiples covering items such as earnings, sales, book value, cash flow, and dividends. Historical ratios help indicate normal trading ranges and provide a base for comparison against current multiples. Therefore, historical average multiples are a key element when choosing a service.
Historical Growth Rates
Growth rates paint a picture of past company performance and provide an easy way to compare companies. Investors seek out quickly growing firms with the hope that growth will continue to fuel the stock price. Five-year growth rates are normally presented for sales, earnings, and dividends. The more robust sites have a wider range of growth rates for various time periods.
The comparison grid indicates which growth rates are provided by each Web site along with the time period covered and their presentation format. The grid also details if benchmarks are provided to help form reasonable comparisons and screens.
Price & Share Data
The price and share data describe various market-related aspects of the company’s common stock. The extent and detail of historical price data as well as volume data is listed in the comparison grid.
Other measures such as MPT statistics (modern portfolio theory measures—alpha, beta, etc.), relative strength, and market capitalization are also detailed. If you focus on price momentum, look for enough price data to examine price movement or look for summary statistics such as relative strength.
Holdings and actions by insiders and institutions are also noted in the comparison grid.
Industry comparisons are useful in identifying stand-out firms. Multiples, growth rates, and ratios give you an added measure of information when analyzed in the context of industry norms. Look for programs that provide industry statistics or at least allow you to screen for companies in a similar industry and then analyze those firms as a group. Some systems even allow you to screen for companies outperforming industry norms.
Financial Statement Data
The raw financial statement data serves as the basis for the calculation of ratios, growth rates, and multiples. Financial statement data is useful for analyzing a single firm to identify trends, but it is more difficult to use directly in screening and ranking. Nevertheless, the better sites include enough information from the income statement, balance sheet, and cash flow statement to judge whether the ratios and growth rates properly reflect the company’s prospects. Some sites offer practically no raw data, while others provide a rich history. Table 1 details the financial statement information provided by each site. For example, by examining the year-by-year earnings of a firm you can gain a feel for performance consistency and earnings trends, which growth rates often mask.
Table 1 also indicates if the site provides direct access to financial statement data through company SEC (EDGAR) filings.
Screening Power & Flexibility
The core feature of any screening system is its set of screening capabilities. The comparison grid includes several categories that describe the screening features provided by the services. When designing screening criteria, the system should allow you to screen against a constant value or another field. Some services even allow you to compare a value against industry and/or index norms. Services such as Yahoo’s Java-based screening tool and the SmartMoney.com Select stock screener provide benchmark figures for fields to help you construct reasonable screening criteria.
The screening system should also keep track of the number of companies passing each piece of criteria (each filter).
Most simple Web-based tools do not allow you to save a set of screening criteria for use in a later session. This will force you to recreate the entire screen every time you wish to apply it. However, the comparison grid indicates the number of predefined screens supplied by each service.
Ease of Use
Typically, the more feature-rich the service is, the more difficult it is to learn how to operate it. The pure HTML-based services often offer little more than boxes to input minimum and maximum values for a given criterion. While these services are easy to use once, repeated screening and fine-tuning can be arduous. The individual program reviews and ratings in Table 2 address this issue, among others.
Viewing Screening Results
Most of the services list the companies passing a given screen in a table with links to additional data. A single company report will typically detail all of the information provided by the database for a company. Tabular reports allow you to compare specific data items for a group of companies. Less common, but still useful, is a report that lists the statistics for the set of passing companies or for a particular industry.
Screening Is Only a First Step
When working with fundamental screening services, data errors can and will exist. There is no such thing as a perfectly “clean” or error-free database. However, the wider the usage of the data, the more likely it is that data errors will be identified and quickly corrected.
Also, it is important to realize that stock screening is only the first step in the stock selection process. The companies passing any filtering process do not represent a “recommended” or “buy” list. It is important to perform due diligence to verify the financial strength of the passing companies and to identify those stocks that match your investing tolerances and constraints before committing your investment dollars. A good screening service is intended to help point you in the right direction.
|Stock Screening Services|
Business Week Online
Business Week Online combines elements of the Business Week publication, Standard & Poor’s data and analysis, and financial data and tools from Telescan and Zacks. The site is primarily a free site, however, subscribers to Business Week magazine also have access to enhanced reports.
Business Week Online provides three Telescan-based stock screening tools within the Investing Tools and Scoreboards segments of the site. The BW 50/S&P 500 Screener provides access to annual magazine rankings of the S&P 500 index stocks. The quick stock search and advanced stock search share a similar look and feel, but vary in the number of screening fields supported—20 versus 77. Finding these modules may prove a little frustrating, given the multiple layers of the Business Week Online site. Users will find the screening modules by first going to the Investing area and then the Stocks section. The stock screener’s link is found at the bottom of the page under Investing Tools.
Users can establish minimum or maximum values for a given criterion or specify that the passing value be as high or as low as possible. Criteria cannot be compared against another field, industry or index norm, or the database as a whole.
Screening results can be displayed in a table or spreadsheet file. Spreadsheet results are displayed in the Web browser with a comma-separated format limited to a few fields that must be copied manually into a spreadsheet program. Screening results feature a backtested performance chart of the strategy. The chart shows the cumulative monthly performance of the screen over the last 12 months. The screening editor, while basic, does cover the major elements used for screening, with a stronger emphasis on technical factors than is found with most screening tools. Screens cannot be saved for later use. We even had to reselect all the criteria switching between screen construction and results mode, typically necessary when fine-tuning criteria. This was a process that was as frustrating as it was time-consuming
The Investors.com Web site is operated by Investor’s Business Daily and offers screening and research tools focused on the CAN SLIM system of investing in common stocks. CAN SLIM is an acronym for seven common characteristics of winning stocks that William O’Neil identified prior to their big market moves. Investors.com offers a number of subscription-based tools, including a custom stock wizard, premium stock graphs, industry groups, and daily graphs for stocks, funds, and options.
The custom stock wizard offers access to 72 screening criteria strongly geared toward the CAN SLIM system. The screening tool uses eight categories of fields to filter its 7,000+ stock database including IBD SmartSelect ratings, earnings, sales, industry and sector, shares and holdings, price and volume, margins and ratios, and general. SmartSelect ratings present the custom IBD ratings for such items as earnings per share, relative strength, profitability, accumulation/distribution, and industry strength. Additional unique criteria include a sponsorship rating filter that looks for companies that are owned by the better-performing mutual funds. Most of the criteria are geared toward seeking out growth-oriented stocks, which is the hallmark of the CAN SLIM approach. However, screens can also consider price-earnings ratios, price-to-book ratios, and dividend yield. Suggested values for screening comparison are available wherever a light bulb icon is displayed. Clicking the light bulb will add a suggested value that follows the CAN SLIM method.
Screening results are displayed in a table with a fixed set of data columns. Users may save up to 10 screens for future use and the screening results can be exported to Excel. There is also a printer-friendly format for printing. Links are provided to additional stock research through the Daily Graphs On-line module, which is available at an additional cost. Ideally, we would like to see additional company research available to subscribers of the custom screen wizard directly, without the need to also subscribe to the Daily Graphs module. Even the research available through Daily Graphs is not enough for in-depth company analysis.
Kiplinger.com combines the editorial content of Kiplinger’s Personal Finance magazine with investment research tools from Stockgroup Information Systems and ComStock.Kiplinger.com is a fairly comprehensive Web site, providing portfolio management, quotes, news, stock and mutual fund data, screening tools, and investment education.
The screening available on the site is not as strong as the average service. Since our last comparison, Kiplinger has switched from a 9,000 stock universe to the Russell 3000 index, which is composed of the 3,000 largest publicly traded companies in the U.S. (this number is typically less than 3,000 due to mergers and currently stands at approximately 2,800). While the Russell 3000 consists of roughly 98% of the total market capitalization of the U.S. market, those looking to screen for micro- and small-cap stocks will need to look elsewhere. Users can construct a screen consisting of up to 10 variables from a group of 27 data fields. The individual factors cover a broad spectrum of popular value, growth, and price factors. Results are presented in a table that automatically includes all the variables used in the screen. The table can be ranked by clicking on any of the column headers.
Separately, Kiplinger.com provides the results of seven basic screens such as high-dividend-yielding growth stocks with expanding dividends. As shown in the comparison grid and table, the site is one of the best in terms of data available for researching companies—exceeding company information found at most free and fee-based sites. While Kiplinger has expanded the amount of financial statement data they provide, they have also dropped insider trading activity data and have scaled back on the amount of analyst data they offer.
The site is best suited for investors looking for individual company research tools, but who don’t require strong screening capabilities.
MarketScreen.com is unique in that it places a large emphasis on intraday, real-time screening of price, volume, and news. Subscribers to the site can seek out companies with price gaps or volume spikes, or those exhibiting specific chart patterns such as the “cup with handle.” Over 250 predefined intraday screens are available, divided into categories such as market overview, price/volume, moving averages, and chart patterns. Tables are available indicating the number of passing stocks by exchange and market capitalization. Users can further limit the presentation of screens to bullish or bearish patterns. The site also offers, for selected screens, backtested performance results for individual companies passing the screen. Backtested results show the number of transactions, the percentage of winning and losing transactions, days in the position, net gain, and annual gain, as well as a performance report. The screening system also covers more traditional elements such as price-earnings ratios and market capitalization. Charts, news, and company snapshots are available for free from PCQuote, which is owned by the same company as MarketScreen.com. However, the fundamental data is quite weak, even given that it is free. For example, there is no historical income statement data. MarketScreen.com offers the day trader and active investor unique and helpful real-time tools. Its offerings are not as broad as some of the general purpose sites, but it meets the needs of its targeted audience.
The MarketWatch Web site uses its staff of reporters to separate itself from other investment information sites by offering headlines, stories, and analysis throughout the trading day. Regular columns cover topics such as IPOs, earnings surprises, and technology stocks. Tables provide details on events such as stock splits, volume alerts, insider stock sales, and share buybacks. Beyond news, the site also offers free multiple portfolios, market and basic company research, stock screening, charting, and mutual fund data. The stock screener is one of the most basic discussed here, with support for only 11 criteria geared toward identifying stocks with recent price and volume action. Criteria are restricted to price action (level, change, or hitting new highs or lows), volume (overall level and block trades), fundamentals (price-earnings ratio and market capitalization), technical (moving averages and relative strength), and industry and exchange membership. Detailed financial statements and news assist in researching stocks that pass filters. The news and research elements of the site are reasonable, but investors seeking a screening tool will want to look elsewhere.
Morningstar.com is a full-featured investment Web site providing portfolio tracking, market monitoring, stock and mutual fund screening and research, educational articles, and message boards. Visitors will find a good amount of free content at the site, while additional portfolio analysis, analyst research, and screening is available through the premium service for $14.95 per month. Research on the site consists of stock screening coupled with research reports. Morningstar provides ratings and analyst reports on 1,700 stocks in over 100 industries. These reports are restricted to premium subscribers, but all users can screen for stocks with high grades. Free screening covers 18 basic elements, while the premium screening module covers over 450 criteria. Free screening is limited to performing comparisons against pre-set constant values, and the screens cannot be saved for use at a later time. The premium screening tool has much more flexibility. Screening criteria can be compared against benchmarks. Premium screens can also be saved for use at a later time.
Comprehensive stock reports start with an overview snapshot and lead to a detailed company profile; financial statements and ratios; charting; stock price performance statistics; stock, industry, and market multiples; earnings estimates and analyst opinions; industry snapshot; insider and institutional shareholder activity; SEC filings; and news. The financial statements provide 10 years of income statement, cash flow, and balance sheet data. The premium reports add details including Morningstar ratings and analyst research. Articles with a focus on current market issues, interviews, and detailed educational features are located throughout the site. Message boards provide a forum for discussion of issues.
Morningstar.com is a well-organized Web site that provides a broad collection of tools for the stock investor. Its premium screening module is one of the most powerful available on-line and its company reports provide in-depth information.
The MSN Money Web site offers a complete personal finance and investing resource. The investing section offers portfolio tracking, charts, news, and stock and mutual fund research. Access to articles, news, screens, company and mutual fund data, and portfolio tracking is free to all Internet users.
The research and screening module on the site has been and continues to be our benchmark for rating all other on-line services. As the comparison grid shows, the company coverage is both broad and deep. The site pulls together the content of Gradient Analytics, Reuters, Zacks, Hemscott, and ComStock into a comprehensive company report. Navigation between the various modules is seamless and well planned.
The screening flexibility is well above average among Internet services. The screening editor is an applet, or program, that we were able to run on Windows-based systems using both Internet Explorer and Netscape browsers. On Mac systems, however, MSN displays a more basic Web-based screening module, as the technology used to build the screener is only Windows-compatible.
Screening is interactive, with passing companies displayed as criteria are added. The criteria encompass a full spectrum of elements ranging from basic company information, such as market capitalization, to changes in analyst recommendations and proprietary stock ratings provided by Gradient Analytics. Criteria can be compared to constants, other fields or even other companies, and index or industry norms. It is even possible to create custom fields in the screening editor, a rare feature among on-line services.
A research wizard offers a step-by-step process of analyzing factors to consider when examining a stock, including its fundamentals, price history, valuations, catalysts, and competition. StockScouter ratings provide risk/reward recommendations for stocks. This proprietary quant-driven system provides fundamental, ownership, valuation, and technical grades. A separate graph displays the projected risk versus return profile of a given stock. MSN Money continues to be one of the strongest research and screening services on the Web.
NASDAQ.com offers a comprehensive investment site that contains a wide variety of investment news and tools. The site relies on a number of sources of company information—EDGAR Online, Thomson Financial, and Vickers—but seems to have overcome the problem of duplicate company data from different suppliers that used to occur.
InfoQuotes provide the starting point for collecting company and industry data with links to news, fundamentals, charts, analyst information, insider holdings, stock reports, SEC filings, “guru analysis,” stock screening, and StockConsultant reports.
Validea.com (discussed later) supplies the guru analysis, which attempts to measure how a stock rates using Validea’s interpretations of the strategies of noted investment managers such as Peter Lynch, Benjamin Graham, Martin Zweig, and Kenneth Fisher. The guru analysis module also serves as the screening engine, allowing investors to identify companies passing a given number of guru screens with either strong or some interest.
For those looking for a more “traditional” means of screening for stocks, the NASDAQ site also offers a screening module from SharpScreen (www.sharpscreen.com). The SharpScreen stock screener is a Java-based application that offers basic screening capabilities. There are 13 screening variables that can only be compared to absolute values. When screening a particular variable, you are given a bar graph with a range of values for that data field—each bar indicates how many companies fit into that data range. You then select the bars that fit the data range for which you wish to screen. This is one of the few services that indicate how many companies are remaining after applying a set of filters, which is useful in identifying the most restrictive filters should few or no companies pass the entire screen.
If SharpScreen were to significantly expand its set of screening variables, it could have a very popular tool on its hands. As it is, they have a tool that, while very easy to use, is relatively weak in its capabilities. StockConsultant offers both free and fee-based screening and analysis. StockConsultant provides technical evaluation of a stock along with a screening tool based on technical factors.
The NASDAQ site offers in-depth company information, but investors seeking stock screening can find better opportunities elsewhere.
Reuters Investor offers a full range of free stock data, including company snapshots, fundamental data, earnings estimates, charts, and analyst recommendations. Registered users gain access to the free, Java-based screening tool called PowerScreener Lite. Reuters also offers a more robust, subscription-based screening engine called PowerScreener 3.0.
PowerScreener Lite is a strong tool that provides access to over 90 data items. Users can even create their own custom fields, a rare feature among Web-based tools. The price of this level of flexibility is a more-cumbersome interface, but PowerScreener offers the advantage of being able to generate fairly complex screens. A single line in a filter can include mathematical and logical manipulation. Screening results are displayed in a table that includes the variables used in the filter, a tally of companies passing the entire screen to that point, and links to company reports on the passing companies. PowerScreener is also one of the few services where you can view all of the stocks passing a screen, instead of limiting you to 50 or 100. In addition, screens can be saved for use at a later time and registered users have access to 13 predefined stock screens
PowerScreener 3.0, which costs $39.99 per month, has the same look and feel as Lite and offers all of the same features. In addition, it offers an expanded data set with over 650 screening variables and six additional predefined stock screens. The results table can be saved as a spreadsheet file.
If you are looking for one site to use for company research, you would be hard pressed to find one that beats Reuters. The site provides free reports covering earnings estimates, ratio comparisons, insider trading, institutional ownership, and company financials. However, we could not locate the dividend reinvestment plan details that the site provided in the past.
Reuters’ Risk Alerts subject a stock to a variety of tests to rate its overall risk. These tests cover estimate revisions, the trend in analyst recommendations, institutional activity, short interest, price activity in conjunction with industry performance, and price momentum. The more tests a stock passes, in theory, the lower its risk.
The Hot Lists segment of the site is also worthy of mention. It provides daily rankings of the best- and worst-performing stocks, industries, and sectors. Links are also provided to the stocks within a given sector or industry for additional research.
The detailed company and industry data coupled with the free and fee-based PowerScreener modules makes the Reuters Investor Web site one of the top in the industry.
The SmartMoney Web site combines the editorial content of its magazine with a rich array of useful investment tools and research. The free site covers the essentials—portfolio management, market news and updates, charting, company and mutual fund research, mutual fund screening, as well as educational articles on financial planning and investment analysis. With a SmartMoney.com Select subscription, users also have access to stock screening.
The site features a unique set of analytical tools that goes beyond the standard set of repackaged data found at most investment Web sites. For example, the charting module covers a wide range of technical and fundamental factors. The SmartMoney Select Stock Screener has a database of over 8,000 NYSE, NASDAQ, and Amex stocks. Its screener is interactive and provides access to 140 data variables. Screening criteria can be compared against fixed variables and, while the module does not handle comparisons against index and industry norms in the same way other services do, it does provide the values of various index norms that you can use for screening. Custom screens can be saved for future use and there are 26 predefined screens from which to choose. Once you run a screen, you can create a spreadsheet and download a report on the passing companies with the data fields you want.
With the Market Map 1000, you can view 1,000 U.S. and international stocks all at the same time. The map is color-coded to show those companies whose price is up or down and the magnitude of the move. The stocks can also be viewed in a similar fashion for fundamental variables such as price-earnings ratio, estimated earnings per share growth, and analyst rating. The maps “visual screening” allows you to filter these 1,000 stocks using seven criteria. From the map, you can also link to charts, financial data, and news for each company. A Fund Map 1000 covers mutual funds in a similar fashion.
Smart Money has taken impressive strides since our last comparison to expand the depth of its company data, as it now offers 15 quarters and 10 years of income statement, cash flow statement, and balance sheet data. The site also offers tools to compare companies and plot figures. Put all together, SmartMoney.com is one of the more complete sites in this comparison.
The Validea Web site is unique among these services in that it places greater emphasis on its predefined screens rather than its ability to allow users to create their own filters. The fact that it is solely subscription-based also sets it apart.
The cornerstone of Validea.com is its collection of “guru” stocks screens, which are the interpretations of stock picking methodologies of such well-known investors as Benjamin Graham, William O’Neil and Peter Lynch. In all, the site tracks 11 guru strategies.
The Guru Stock Screener is similar to the one available at NASDAQ.com in that it attempts to measure how a stock rates using Validea’s guru screens, however, here you have access to 11 screens instead of eight. With the guru screener, users can identify companies passing a given number of guru screens with either strong or some interest or they can focus on only one screen and see the companies that match its criteria.
The Advanced Guru Stock Screener combines the screening capabilities of the “basic” guru screener with the ability to use your own fundamental criteria. Users can choose from 16 variables for screening using upper and lower limits for each filter. Once you have created our own screen, you can save it for future use.
The Top Industries Report highlights the industries that have the largest number of stocks passing the guru strategies. Industries are then ranked using Validea’s proprietary Industry Index, which identifies industries with both growth and value characteristics. The Validea Industry, Growth and Value indexes can range from 1 to 99 (99 being the best). Users can then click on an individual industry name to see the top-ranked stocks within a specific industry according to the gurus.
Given the site’s overall focus on its guru screens, it is perhaps not surprising that its company-specific data is heavily geared toward the various guru screens. By entering a company ticker, users can see how well an individual stock matches the various guru criteria. Detailed analysis is also available that discusses how a stock is behaving within the context of the individual guru screens. The site only provides cursory fundamental company data.
For those wishing to leave the portfolio creation process up to someone else, Validea has also created a collection of model portfolios based on the guru screens. There is also the biweekly Validea Hot List newsletter that is a model “consensus” portfolio of stocks that are highly rated by multiple guru screens. The Validea Web site provides unique information for those who want to invest based upon the strategies of investment gurus. However, be prepared to look elsewhere if you wish to perform individual stock analysis, especially for the stocks that pass the guru screens.
Value Line Investment Survey Online
Value Line Investment Survey Online provides screening and data access to Value Line’s in-depth reports of common stocks. The service gives you access to the 1,700 companies tracked in the paper-based Value Line Investment Survey, making it the smallest database in the comparison. However, as the comparison grid reveals, the Investment Survey provides a rich database including proprietary Value Line rankings. On-line screening provides access to a series of predefined screens and a wide range of data fields; however, the interface is not as user-friendly as some of the other Web sites highlighted here. The amount of financial data available is relatively light, with only selected income statement and balance sheet items, and no cash flow statement data. Screening is limited to using upper and lower limits for a particular data field.
As a research tool, the program is above average when judged on the depth of its database; however, as mentioned earlier, it only covers 1,700 stocks. The ability to access and print the paper-based Value Line reports is a valuable option. The screening tool is somewhat lacking, but, overall, the system remains a good general-purpose screening and research tool.
The Yahoo! Finance Web site has established itself as a popular destination for individual investors. The site brings together a variety of free tools and is able to leverage its linking expertise to bring together a reasonable collection of news and research data.
News sources include Reuters, Fortune, Business Week Online, Forbes.com, the Associated Press, CNNMoney.com, MarketWatch, PR News, and Business Wire. Market and stock commentary from popular Web sites such as the Motley Fool and TheStreet.com help round out the offerings. Fundamental stock data comes from Capital IQ and EDGAR Online. Since our last comparison, the amount of financial statement data provided at the site has dropped. This apparently coincides with the switch from Reuters to Computershare for financial statement data. Thomson provides earnings estimates and brokerage recommendations. Even insider transactions from Computershare are available for free.
Yahoo! Finance’s stock screening tool is an interactive Java-based module that allows users to construct screens from a list of over 140 data variables, which are geared more toward price activity than fundamentals. The site also offers 19 predefined stock screens.
Beyond offering screening, comprehensive investment news and data, Yahoo! Finance also offers some of the most popular message boards on the Internet. Not only does this site have boards for over 8,000 stocks, but it also boasts boards devoted to brokerage firms, IPOs, options, and short-term trading. The message boards in the stock area are divided into industry groups such as basic materials, energy, financial, and utilities. You can also perform a message board keyword search.
Zacks.com offers a wide range of investment information and screening options. Users have access to daily E-mail alerts covering items such as analysts’ changes, detailed company financials, brokerage research reports, predefined screens, and custom screening. Zacks offers 20 predefined screens divided between the predefined screener (11) and nine Profit Tracks screens. The predefined screener allows you to further break down the database into market-cap ranges. A “profit track,” as defined by Zacks, is a stock-picking strategy that had success through the bear market of 2001–2002 and the current bull run that started in 2003. Users can access the current list of companies passing the profit track screens as well as performance data.
Custom screening offers 100 variables covering the usual range of screening options, plus earnings estimates, brokerage recommendation figures, and Zacks ratings, which are not available through most services. Zacks also allows users to save custom screens for later use.
Zacks provides detailed reports on a company’s financials, ratios, industry comparisons, consensus earnings estimates, and analyst recommendations. Unfortunately, the site has seen its detailed analyst estimate reports go by the way-side and the depth of financial statement data has declined. The site continually presents new screening ideas. The “screen of the week” provides a description of a screen as well as the screening parameters behind it. Zacks also has the All Star Analyst portfolio. The portfolio is comprised of stocks that are recommended by analysts highly rated by Zacks.
Overall, Zacks offers a wide range of useful tools for those with a stock portfolio. Screening and research is above average. The basic tools necessary to construct a stock portfolio are provided, while the portfolio management module helps investors keep abreast of their holdings. The site is especially strong in screens involving earnings estimates and analyst recommendations.