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What is A Stock Screener?
Grade Level: K-12 and up
Subjects: Economics, business, language arts, social studies
Time Period: One class period
Resources: Internet access
Objectives: In this lesson, students choose stocks from thousands of companies they may have never heard of. They will use a tool called a stock screener to select stocks that fit their investing criteria, such as price-to-earnings ratio, earnings growth, and the past year performance. This technique will allow students to find stocks efficiently for the Global Stock Game (GSG).
Background: Stock screeners used to be expensive and available to only professional money managers. Now, people can use a stock screener free from Yahoo! Finance http://screen.yahoo.com/stocks.html. The Yahoo! Stock Screener consists of eight categories (criteria). Each one of these variables will help students select stocks that meet their criteria from a database of over 6,000 stocks. The eight categories include: • Industry • Analyst recommendation • Maximum or minimum share prices • Market capitalization • Price-to-earnings ratio • Average daily volume • One year estimated earnings growth • One year stock price performance
To use this screener, students don’t have to select all criteria at once. For example, some students may be interested in only stocks that have increased in value over 50% for the past year. They would select the last criteria (one-year stock price increased), set the value at greater than 50%, and leave the other seven unchanged. The screener will bring back over 700 companies that meet these criteria. Now, they have to fine-tune their screening by adding more criteria such as the industry, for example - semiconductor. Then, students will find only a few companies that meet these criteria. As they learn more about these criteria through this lesson or other lessons on this Web site, students will find this type of screening tool helpful in selecting stocks for investments.
To analyze the screening results, students will look into additional variables, such as price-to-earnings ratio, market capitalization, average daily volume, and others. By clicking onto the heading of these variables from the top, they will see the stock list in ascending order or see the stock list in descending order by clicking onto the heading from the bottom.
Activities:
1. One of the investing strategies is to select high growth small-cap companies. To find small-cap stocks from the screener, students should select the “Market Cap” for under $500 million and keep all other variables in the “Any” position. Now, complete the table below to narrow the selections.
|Small-cap companies selection criteria |
|Industry |P/E ratio |%Growth |% Price Increase |# Of Results |
|1. Any |Any |(50 |(50 | . |
|2. Software |Any |(50 |(50 | . |
|3. Software |Max. 30 |(50 |(50 | . |

1. Another strategy is to go with the Wall Street professionals. To find stocks that analysts are presently strongly recommending, students should set “Analyst Recommendation” to the “1” position. Now, complete the table below to narrow the selections.
|Analyst recommendations selection criteria |
|Industry |P/E ratio |%Growth |% Price Increase |# Of Results |
|1. Any