S4 E7 : HOW TO READ STOCK SCREENER AND CHOOSE STOCKS.

🎯 Why This Episode Matters:

There are thousands of stocks in the Indian market. But how do investors find good ones — like TCS, HDFC Bank, or Asian Paints — before everyone else?

The answer: Stock Screeners.

 

🧩 1. What is a Stock Screener?

A stock screener is an online tool that helps you filter stocks based on specific criteria.

Think of it like Flipkart filters:

  1. You want a phone with 8GB RAM, 128GB storage, under ₹20,000?

  2. Flipkart shows only those.

Similarly, you can filter stocks with:

  1. PE ratio < 20

  2. ROE > 15%

  3. Debt = 0

  4. Market Cap > ₹10,000 Cr

🧠 This helps you focus only on quality stocks, not random ones.

🔧 2. Best Free Screeners in India

📍 Screener.in — most popular

📍 TickerTape

📍 Trendlyne

📍 MoneyControl Screener

Let’s take Screener.in as our main tool.

🏁 3. Sample Screener Setup: Find “Safe & Profitable” Companies

Apply these filters to find fundamentally strong stocks:

  • Market Cap > ₹5,000 Cr
    ✔ Large, stable companies

  • PE Ratio < 25
    ✔ Reasonably valued

  • ROE > 15%
    ✔ Indicates efficient use of capital

  • Debt to Equity < 0.5
    ✔ Low or no debt

  • Profit Growth (5Y) > 10%
    ✔ Consistent and steady growth

 

This will give you companies like:

  1. HDFC Bank

  2. Infosys

  3. Tata Consumer

  4. Asian Paints

🎯 Now you're not shooting in the dark. You're investing with logic.

📘 4. How to Read a Company Page on Screener

Search any company like TCS and you’ll see:

a) Key Ratios

PE, ROE, ROCE, Debt, Profit Growth

b) Profit & Loss Table

Revenue, Expenses, Net Profit year by year

c) Balance Sheet

Total Assets, Liabilities, Debt, Cash

d) Cash Flow

Is the company generating real cash or just paper profits?

e) Promoter Holding

Higher is better (shows trust)

f) Compounded Profit Growth

3Y, 5Y, 10Y — long-term view

 

🔍 5. Common Red Flags

Avoid stocks that:

  1. Have high debt

  2. Have inconsistent profits

  3. Promoters are reducing stake

  4. Show sudden jumps in profits (may not be sustainable)

  5. Have PE > 100 (overvalued unless growth justifies)

✅ 6. Golden Tip

📌 Save your favorite screeners and re-run them monthly.

That’s how you’ll discover hidden gems before they explode.

🧠 Summary:

  1. Use stock screeners to filter only high-quality companies

  2. Learn to read key metrics like ROE, PE, Debt, Promoter Holding

  3. Stick to simple, strong, growing businesses