The Big List of Magic Screener Formulas – Fundamentals

secret fundamentals screener formulas

This is an evolving post that’ll keep updating based on feedback. However, the general screener conditions that I have added at the end will help you create different types of screeners and discover exciting stocks that suit your stock picking style, and therefore this post may evolve slowly.

Keep checking back for more:

RULES YOU MUST FOLLOW

1. Never rely on what a fundamenta screener throws up without reading the AR, business model, announcements, and quarterly results.

2. After studying the stock, check the charts as well, just to validate your study and know the trend.

3. I use Chartink for creating fundamental screeners. You can use any tool that you are comfortable with and apply any or all of the following formulas. All the formulas are written in a way that you can use to create screeners at Chartink.

4. Pick stocks that have good volumes. Forget the pennies.

5. You can also create fomulas that reconcile with your style of investing.

LIST OF SCREENERS BASED ON FUNDAMENTALS

1. IMPROVING PROSPECTS (PROFITS)

All conditions to be fulfilled:

Net Profit [yearly] Greater than TTM Net profit* NUMBER 1.2 (You can play with different numbers. For example, 1.1 implies profits have increased by 10%, 1.5 implies an increase in profits of 50%, and so on)

Net Profit [yearly] Greater than NUMBER 0 (This is to ensure that yearly net profits are positive)

To this you can toy with the market cap to discover small, mid and large cap stocks. Check the General Screeners at the bottom and add the market cap screener.

2. LOW PE COMPANIES WITH SOME DIVIDEND YEILD

Face Value Greater than NUMBER 2 (You can play around with the face value, you can look for FV of Rs 1 or FV 5 or 10 or anywhere between 1-10, it’s your choice)

Yearly PE Ratio Less than NUMBER 15 (Play around with the PE ratio that you are comfortable with)

Dividend Greater than NUMBER 1 (this gives you the dividend yield)

3. COMPANIES THAT ARE TURNING AROUND

Net Profit [yearly] Less than NUMBER 0 (makes a list of loss making companies)

Net Profit [quarter] Greater than NUMBER 1 (narrows down to loss making companies that reported a profit for the latest quarter)

4. EFFICIENT COMPANIES

Gross profit margin Greater than NUMBER 25

Companies buy raw material and convert it to finished goods. These finished goods are sold and the difference between the sale price and the cost of production (including the raw material) is the gross profit margin.

After pocketing the gross profit, the companies use it to pay the office and sales costs and the taxes.

A company that reports a healthy gross profit margin therefore can be assumed to be an efficient company, and this formula helps you discover such companies.

You can experiment by adding the general screening conditions that follow at the end of this article to suit your stock picking style.

Now, USE THESE CONDITIONS TO CREATE YOUR MAGIC SCREENER

GENERAL SCREENING CONDITIONS THAT YOU CAN ADD ON OR USE INDEPENDENTLY

You can add this to any screener above depending on your stock preferences

1. Yearly PE Ratio Less than NUMBER 10 (to find low PE stocks – you can play with the number and conditions. You can use this formula to even figure out high PE companies )

2. Yearly PE Ratio Greater than equal to NUMBER 1 (to ensure that the discovered company reports +ve numbers)

3. Market Cap Less than NUMBER 50 (to discover small, mid or large caps. You can play with the number and change the Less Than to More Than)

4. Price to Book Value Less than NUMBER 3 (to discover companies with low P/BV. You can play with the number.)

5. LatestVolume Greater than NUMBER 50000 (to discover liquid companies. You can play with the number)

6. Latest Close Greater than 1 day ago Close * NUMBER 1.05 (add this to your screener when you want to discover a stock that has perked up. 1.05 is 5% appreciatiion, and you can increase or decrease this number (decrease if you want to discover stocks that can be shorted)

7. Latest Volume Greater than Latest Sma (volume,10) * NUMBER 3 (if you want to discover stocks where volumes may gradually start picking up)

8. TTM Sales Greater than Sales Turnover [yearly] It may be possible that the company is reporting higher numbers but is unable to report higher profits for some reason. This filter will help you discover such companies that are growing.

9. Total Loans Equals NUMBER 0 (to discover debt-free companies)

 

 

 

 

 

 

 

 

 

 

 

4 Comments on "The Big List of Magic Screener Formulas – Fundamentals"

  1. Can you tell me how important is PE value and whether it should be above or below 10 and why?

    • sunil.tinani | July 2, 2018 at 2:45 am | Reply

      A low PE is positive factor in a bear market and a negative factor in a bull market

      A high PE implies that the company is expected to do better going forward

      An astronomical PE implies that investors perhaps expect things from the company that it may not be able to deliver

      That said, this post is about you creating your own formula, and it will help you write your own screener at Chartink.

  2. Hi Sunil Sir,

    There’s a query regarding screener.

    I started with 13/48 EMA screener and then shifted to 10/21 EMA to identify stocks for intra day trade in Cash segment.
    Results are then tracked through the 10,3 super trend + VWAP trend.

    Pls suggest if mentioned EMA is a good strategy or we can use something else too to identify trades for the day.

    • sunil.tinani | July 4, 2018 at 4:05 pm | Reply

      For intraday, work with

      Price – VWAP crossover

      EMA 5-10 crossover..

      on 15M-30M periods.. that’s all you need

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