Using the Stock Screener - An Investors Swiss Army Knife for Investing

Let’s face it. Trying to find companies to invest in is a tedious process. Researching multiple companies and their financials, estimates, prices, and charts requires a lot of grunt work. What if I tell you that there is a tool that can help simplify a portion of your investment process and workload? Let me introduce to you the “Screener.” 

A “Company Screener” tool lets you quickly identify potential investments that meet specific criteria in an investable universe. One of the key factors here is to be able to clearly identify the investment or trading strategy’s criteria to get the best quality of stocks that can potentially be added to your portfolio or even for a short-term trade. This helps reduce the time in your entire workflow process by simply removing companies that do not meet your personal standards and help remove bias from the stock selection by reducing the investing universe.

The stock screening process

Want to know how to screen for stocks? Let’s start first by identifying what companies we would like to see and picking the top 3 based on my preferred criteria.

• Criteria 1: It must be a Strong Buy.
• Criteria 2: Highest performing Stock YTD.
• Criteria 3: Must have at least 8 analysts or above covering the stock.
• Sorting: YTD Performance

This is a very simple screening set that lets you find companies that are outperforming the index and have strong recommendations and following of analysts. Setting the number of analysts to a medium helps smooth out the recommendations to ensure that it is not skewed to only a few analyst recommendations.

Finding the screener tool and setting filters

First, go click “Tools” and choose “Screener.”

Then, set your first criteria based on your strategy. Following the criteria mentioned earlier, you can program the screener to find these companies within a few clicks.

Investors can then sort the results by performance to find the stocks that are beating the market and has a strong following and recommendation. 

With the screening process and sorting, investors can focus on companies that fit the identified criteria, conduct their due diligence, check the charts, etc.

The results are in!

Riot Platforms (RIOT)

Riot Platforms, Inc. is a vertically integrated Bitcoin mining company. The Company focuses on enhancing capabilities to mine Bitcoin in support of the blockchain. The company also provides critical and comprehensive mining infrastructure for institutional-scale hosted clients to mine Bitcoin at its Rockdale Facility. The company operates through three segments:

• Bitcoin Mining - operates approximately 88,556 miners, with a hash rate capacity of 9.7 exahash per second (EH/s).
• Data Center Hosting - operates at its Rockdale Facility and focuses on providing co-location services for institutional-scale Bitcoin mining companies.
• Engineering - designs and manufactures power distribution equipment and custom-engineered electrical products. 

What does the chart say?

Riot Platforms recently broke out of its multi-month range from $3.13-$10.53. With no clear near-resistance in sight, investors find Riot test the $23.72 high. Investors willing to buy into RIOT may wait for a retest of its new support or look into the intraday for potential continuation patterns like flags, triangles, etc. Investors should also note that currently, the RSI reading shows that it is overbought and can later provide a pause for a potential entry.

Reta Pharma (RETA)

Reata Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing, identifying, and commercializing therapies. The Company focuses on small-molecule therapeutics with mechanisms of action for treating severe, life-threatening diseases.

Its lead programs:

• Omaveloxolone - focused on the rare neurological disease called Friedreich's ataxia (FA) 
• Bardoxolone - focused on the rare forms of chronic kidney disease (CKD).

The company possesses worldwide rights to manufacture, develop and commercialize Omaveloxolone, bardoxolone, and other Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications. The Company is also developing Cemdomespib, the lead product candidate from its Hsp90 modulator program, in neurological indications. The Company currently has three pipeline programs for CKD.

What does the chart say?

Reata Pharma has recently broken out of its tight trading range after gapping into the $80.00 - $96.00 area due to its FDA approval of “Omavoloxone.” With no confirmation of the breakout, investors may still have time to buy into its support or wait for potential confirmation.

Symbiotic Inc, (SYM)

Symbotic Inc. focuses on artificial intelligence (AI)-enabled robotics automation technology. It commercializes, develops, and deploys advanced, end-to-end solutions that improve supply chain operations. The company’s platform improves stock-keeping unit (SKU) agility, accelerates the movement of goods through the supply chain, and fulfills orders. The company's platform is composed of the following:

• Atomizing robotics
• Buffering structure
• Autonomous mobile robots 
• Robotic palletizing cells
• Cost Reducing Software

The company serves industries such as retail, food and beverage, groceries, third-party logistics, and others.

What does the chart say?

Symbiotic just tested its previous high of $28.44 and is still strong. There is no sign of exhaustion yet, but RSI is registering overbought signals with its continuous run-up and break out from the $20.00 area of resistance. Investors willing to buy into SYM may want to wait for a breakout and confirmation if they plan to trade SYM or wait for a retest of the last breakout high at the the$20.86-$23.50 area.

Final Thoughts

Using a “Screening” tool is an excellent way for investors to “automate” a portion of the investment process and increase time in doing due diligence for potential investments. One of the best things in the screener is the flexibility of using different sets of filters like market cap, financials, estimates, etc. This gives investors different ways of defining an investable universe and optimizing their investment strategy. However, Investors should still understand that the screening is only one part of the process. Having a clear set of trading and investing rules and risk management should still be part of any investment strategy.

 

On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.