1. Find New Research Opportunities
In using a stock screener, you are using its criteria offering to discover a list of companies that you were not likely aware of before. The metrics of a stock screener that you select provides you with the basis of your new research. For example, if you screen for large-cap companies in the technology sector with a trailing price-to-earnings ratio of 20 or less and an earnings-to-growth ratio of 1 or less, you have created the basis of your research.
The list of companies that are outputted from a stock screener is something that would have been difficult to come across without the screener, but in using it, you now have multiple companies you can conduct further research on. Once you have done your more in-depth research and due diligence, you can then decide for yourself which companies you will invest in.
2. Solidify Your Investment Strategy
Stock screeners assist you in solidifying and improving your investment strategy. As you continue to gain more knowledge regarding the investment world, you will get better at investing. Using a stock screener allows you to expand your focus, establish new goals, and further optimize your portfolio risks.
You can think of a stock screener as a gateway to new knowledge. Once you feel comfortable with the research and investments you have already done, stock screeners are there to assist in making you more knowledgeable. All the companies that are outputted to you by your screening criteria allow you to expand your focus. With the companies you have selected to conduct in-depth research on, you can create new investment goals and further optimize your portfolio risks so that you can create the strongest portfolio possible.