A guide to using our stock filters

Prime Screener

Prime Screener is a tool for DIY equity investors. It seeks to help you screen stocks based on key fundamental metrics. This makes your investing a more process-driven approach, where you can eliminate stocks that are do not make the cut in terms of quality, growth or valuation metrics and focus on those that do.

Prime Screener does not give you all the data, metrics, or ratios that exist. Instead, we have only picked those metrics that we think are necessary, relevant and useful in filtering stocks before you get to analysing individual companies.

We have divided these metrics into the following heads:

  • Quality, key parameters related to a company’s balance sheet
  • Growth, key parameters related to a company’s profit & loss statements
  • Valuation: key parameters related to the company’s price in relation to key metrics such has earnings or book value.
  • Ownership: An additional filter to know qualitative aspects such as shareholding pattern of promoters, MFs, and FPIs besides the proportion of promoter pledging.

This guide explains each of these and how to use it.

In addition to these filters, we have Premium Screeners. Our research team has designed these screeners which use a completely different set of filters and trends to shortlist stocks. Our research team will be updating and adding to this list. Read our guide to our Premium Screeners here.

You can download a PDF version of this document here.

How should you use Prime Screeners?

  • Shortlist stocks based on growth, quality, valuation, and ownership metrics. 
  • Filters in each metric are those that are useful and genuinely relevant for analysis so that you arrive at a meaningful shortlist. We haven’t stuffed every conceivable filter which will only increase complexities for you.
  • If you’re looking at banking stocks, make sure to use the filters specific to banks such as NPA ratios, loan book or capital adequacy. That’s information not easily available in a single place or tool elsewhere!
  • Premium Screeners are filters pre-designed by PrimeInvestor’s research team. These filters do not overlap with the other metrics. You can further refine the shortlist from running Premium Screeners by adding on other growth, quality, valuation or ownership filters.
  • Save the filters you’ve set up for easy access the next time you want to run screeners.
  • Click on individual stock names for details on balance sheet, profit & loss statements, quarterly results, ratios and more, which you can use to further analyse your shortlisted stocks.

Section 1 – Points to note on data

Before getting to the filters and explanations, a few important points you need to note:

  1. The screener is not a stock data tool. It is an analysis tool. If you wish to download raw stock data, you will need to go to individual stock details pages.
  2. We have used consolidated data wherever applicable and standalone in all other cases.
  3. The screener is provided only for NSE listed companies. We believe this adequately covers the universe of tradable stocks. You can go to the stock details page to check specifics of a company listed only on the BSE and not on the NSE.
  4. The data provided will be the latest data filed by the company with the stock exchanges. This could vary between companies. For example, the financial year end may be March for some, December for some and September for others. Similarly, at quarter ends, some companies may have declared results while others may be yet to do so. The calculations given in the screener take into account the latest disclosed data available from our data provider at the time you use the tool.
  5. In filters that use compounded annual growth, where the beginning or end values are losses, we have not calculated the CAGR.
  6. Some filters given will be relevant for some sectors only and not for others. You need to be aware of which ones will suit the sectors/companies you are looking at. For example, while you would find data on sales or EBITDA for banking companies, the right metrics to see would be net interest income and net interest margin. We have tried to provide relevant sector-specific data wherever available.
  7. Some companies may not have past data disclosure either because they were listed through a recent IPO or were demerged from some other entity. You may not find growth or quality metrics for such companies.

Section 2 – How to start

By default, you will get the entire universe of stocks at the outset.

From this, you can begin by choose your stock universe by setting ranges for one or more of the following filters:

  1. Stock price
  2. Stock market cap
  3. Sector
  4. Price-to-earnings ratio
  5. Price-to-book ratio

For example, you can choose the chemicals sector and give a range of less than Rs 5,000 crore market cap, or a P/E ratio of less than 10 times.

You can also choose to ignore the filters above and move directly to the filters explained below.

Section 3 – Filters and how to use

Filters help you screen stocks based on multiple criteria. For example, you might want to choose companies with revenue of over Rs 100 crore. Or you may choose companies with say PAT growth of over 10%. Or you might want companies that grew PAT by 10% while also having positive operating cash flows for the past few years.

We have organized these filters into 4 broad heads as follows:

  • Growth filters – key parameters related to a company’s profit & loss account
  • Quality filters – key parameters related to a company’s balance sheet
  • Valuation filters – key parameters related to a company’s price in relation to metrics such as earnings or book value.
  • Ownership filters – metrics to understand shareholding pattern of promoters, MFs and FPIs

The full list of metrics is explained below, along with how to use each of them in case you are new to equity investing.

Disclaimers

The output derived in Prime Screeners are not recommendations given by Redwood Research. Prime Screener is only a tool to provide you with output based on criteria that you choose. Prime Screener is meant for you to filter, shortlist, and identify stocks from the whole stock universe that you wish to further analyse. Redwood Research will not be responsible for any investment decisions you take based on these screeners.    

Redwood Research (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200007478).

Legal Disclaimer : Redwood Research (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200007478). The content and reports generated by the entity does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities. All content and information is provided on an ‘As Is’ basis by PrimeInvestor. Information herein is believed to be reliable but PrimeInvestor does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. The services rendered by PrimeInvestor are on a best effort basis. PrimeInvestor does not assure or guarantee the user any minimum or fixed returns. PrimeInvestor or any of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates will not liable for any losses, cost of damage incurred consequent upon relying on investment information, research opinions or advice or any other material/information whatsoever on the web site, reports, mails or notifications issued by PrimeInvestor or any other agency appointed/authorised by PrimeInvestor. Use of the above-said information is at the user’s own risk. The user must make his own investment decisions based on his specific investment objective and financial position and using such independent advisors as he believes necessary. All intellectual property rights emerging from this website, blog, and investment solutions are and shall remain with PrimeInvestor. All material made available is meant for the user’s personal use and such user shall not resell, copy, or redistribute the newsletter or any part of it, or use it for any commercial purpose. PrimeInvestor, or any of its officers, directors, employees, or subsidiaries have not received any compensation/ benefits whether monetary or in kind, from the AMC, company, government, bank or any other product manufacturer or third party, whose products are the subject of its research or investment information. The performance data quoted represents past performance and does not guarantee future results. Investing in financial products involves risk. Mutual Fund Investments are subject to market risk, read all scheme related documents carefully. As a condition to accessing PrimeInvestor’s content and website, you agree to our Terms and Conditions of Use, available here. This service is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Redwood Research or its affiliates to any registration or licensing requirement.

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