What is Stock Screener?Stock screener is a tool that evaluates stocks based on various criterias and generates a list of potential trading ideas. In Stochie, the criterias are broadly categorized as descriptive, fundamental and technical.
Market TypeIn Kuala Lumpur Stock Exchange (KLSE), there are three main markets which are known as MAIN, 'Access, Certainty, Efficiency' (ACE) and 'Leading Enterpreneur Accelerator Platform' (LEAP).
- MAIN market is the biggest out of the three markets with 780 companies (exclude Exchange Traded Funds). For listing in MAIN market, there are requirements such as the companies need to demonstrate that they have achieved certain profit track record or market capitalization and the companies must issue at least 25% of its total shares to the public.
- ACE market has less stringent listing requirements compared to the MAIN market such as no minimum operating track record or profit requirements. However, it needs approved sponsorhip to be listed.
- LEAP market provides Small & Medium Enterprises (SMEs) with greater fund raising access and visibility via the capital market. It has the least stringent entry requirements out of the three markets as such it is accessible only to sophisticated investors (i.e entities or individuals with certain minimum net assets, incomes or licenses).
Additional reading: Listing requirements for the KLSE markets
SectorA sector is a group of businesses which shares same or related business activities. Categorizing companies into different sectors provides an indication as to whether a sector is expanding or experiencing contraction as a whole.
In Stochie, an expanded Fourastié's model is being utilized which are:
- Primary sector which includes any industry involved in the extraction and production of raw materials, such as farming, logging, hunting, fishing, and mining.
- Secondary sector encompasses industries that produce a finished, usable product or are involved in construction.
- Tertiary sector involves the giving away direct services to its consumers. It supplies services to the immediate consumers and the business houses and it includes services related to retail, transportation, hotels, sales and much more.
- Quaternary sector is an addition to the original Fourastié's model. It sometimes referred to as the research and development sector, consists mainly of businesses providing information services, intellectual activities and knowledge based activities aimed at future growth and development.
Additional reading: Fourastié's model
IndustryAn industry is a subset of a sector. It further categorizes businesseses into different groupings based on their products and services. This helps investors to analyze how companies in a particular industry are performing comapred to their peers.
Industrial categorizations by Malaysia Investment Development Authority (MIDA) is closely referenced in Stochie.
Additional reading: MIDA annual reports
Outstanding SharesOutstanding shares are all the shares of a company that have been authorized, issued and purchased by investors and are held by them. They are distinguished from treasury shares, which are shares held by the company itself, thus representing no exercisable rights.
Additional reading: Outstanding Shares
PriceThe current share price or the closing price during the last trading session.
Market CapMarket cap is the market value of a publicly traded company's outstanding shares. Since outstanding shares are bought and sold in public markets, capitalization could be used as an indicator of public opinion of a company's net worth.
Formula: Market Cap = Outstanding Shares x Current Share Price
Additional reading: Market Capitalization
Dividend YieldDividend yield is the annual dividend per share, divided by the price per share. It is often expressed as a percentage.
Dividend yield is used to calculate the earning on investment (shares) considering only the returns in the form of total dividends declared by the company during the year.
Formula: Dividend Yield = Annualized dividend per share / Current Share Price x 100%
Additional reading: Dividend Yield
Average VolumeAverage volume is commonly reported as the average number of shares that changed hands per day in a given period of time. In Stochie, 91 days time interval is used.
Higher average volume for a stock is an indicator of higher liquidity in the market. One use case will be day traders who focus on making quick, but smaller gains typically will prefer stocks with high volatility and also liquidity.
Additional reading: Average Volume
Relative VolumeRelative volume is the ratio between current volume (intraday adjusted) or last traded volume and average volume.
Formula: Relative Volume = Current Volume / Average Volume
Earning DateEarning Date refers to the date of a company's upcoming quarterly or annual report.
Revenue GrowthRevenue is the total amount of income generated by the sale of goods and services related to the operations of the business. It provides an indication of the health of a business's sales.
Formula: Revenue Growth QoQ = (Revenue from current fiscal year quarter - Revenue from last fiscal year quarter) / Revenue from last fiscal year quarter x 100%
Formula: Revenue Growth YoY = (Revenue from current year - Revenue from last year) / Revenue from last year x 100%
Formula: Revenue Growth (5 Years) = (Revenue from current year - Revenue from past 5 years) / Revenue from past 5 years x 100%
Gross MarginGross profit is the profit a company makes after deducting the Cost of Goods/Services Sold (COGS). COGS includes the cost of raw materials, equipment, employee labor and shipping.
Gross margin is calculated as gross profit over revenue and it is a financial metric that measures the competitive advantages of a company relative to its peers.
Formula: Gross Profit = Revenue - COGS
Formula: Gross Margin = (Gross Profit - Revenue) / Revenue x 100%
Additional reading: Gross Margin
Operating MarginOperating Profit or also known as Earnings Before Interest and Taxes (EBIT) is a measure of a firm's profit that includes all incomes and expenses (operating and non-operating) except interest expenses and corporate tax expenses. In a way, EBIT is gross profit after deducting operating expenses (i.e. the costs incurred to sustain business operations such as rent, marketing, insurance, corporate salary, depreciation and amortization).
In turn, operating margin is EBIT divided by revenue and it indicates how efficient a business is at managing its operations.
Formula: Operating Profit = Gross Profit - Operating Expenses
Formula: Operating Margin = (Operating Profit - Revenue) / Revenue x 100%
Additional reading: Operating Margin
Net Profit MarginNet profit or earning is net income generated by a company. It is operating profit after taken into account interest expenses (i.e. the costs incurred by an entity for borrowed funds) and tax expenses (the costs incurred by an entity due to taxes).
Net profit margin is net profit over revenue and it is the most-used-parameter by investors to assess the overall profitability of a company.
Formula: Net Profit = Operating Profit - Interest Expenses - Tax Expenses
Formula: net Profit Margin = (Net Profit - Revenue) / Revenue x 100%
Additional reading: Profit Margin
EPS GrowthEarnings per share (EPS) is calculated as by dividing company's net profit by the outstanding shares of its common stock.
EPS growth is the percentage change of of a company's EPS over a given period of time. It measures the rate of growth of a company.
Formula: EPS = Net profit / Outstanding shares
Formula: EPS Growth QoQ = (EPS from current fiscal year quarter - EPS from last fiscal year quarter) / EPS from last fiscal year quarter x 100%
Formula: EPS Growth YoY = (EPS from current year - EPS from last year) / EPS from last year x 100%
Formula: EPS Growth (5 Years) = (EPS from current year - EPS from past 5 years) / EPS from past 5 years x 100%
Additional reading: EPS
P/E RatioP/E ratio is the ratio of a company's market capitalization to the company's net profit. The ratio is used for valuing companies and to find out whether they are overvalued (high value) or undervalued (low value).
Formula: PE = Current Share Price / EPS
Additional reading: PE Ratio
PEG RatioPrice/Earnings to Growth ratio is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth.
If the market is perfectly efficient, a company's P/E and expected growth should be equal to 1, which represents a perfect correlation between the company's market value and its earnings growth. However it is not the case in reality, which in turn allow investors like Peter Lynch to acquire companies with undervalued PEG Ratio (<1). In Stochie, trailing one year PEG is being used.
Formula: PEG Ratio = P/E Ratio / EPS Growth YoY
Additional reading: PEG Ratio
P/S RatioPrice/Sales (P/S) ratio is calculated by dividing the company's market capitalization by the revenue. The P/S ratio is typically used for evaluating high-growth companies or companies in cyclical industries which do not register positive net profit every year.
Formula: P/S Ratio = Market Cap / Revenue
Additional reading: P/S Ratio
P/B RatioPrice/Book (P/B) ratio is a financial ratio used to compare a company's current market value to its book value which is also known as shareholder's equity. The P/B ratio indicates whether an investor is paying too much for what would remain if the company went bankrupt.
Formula: Book Value = Total Assets - Total Liabilities
Formula: P/B Ratio = Market Cap / Book Value
Additional reading: P/B Ratio
Price/Cash RatioPrice/Cash ratio refers to the ratio of the market capitalization to the latest quarter total cash. It measures the company's ability to generate additional revenues.
Formula: Price/Cash Ratio = Market Cap / Total Cash (from latest quarter earnings report)
Price/Free Cash Flow RatioFree Cash Flow is the cash generated from operating activities minus capital expenditures. Capital expenditures are expenses which is necessary for the company to generate income (i.e. acquire new office, upgrade or buy new equipments). Similar to Price/Cash ratio, it measures the company's ability to generate additional revenues.
Formula: Price/Free Cash Flow Ratio = Market Cap / Free Cash Flow
Additional reading: Price/Free Cash Flow Ratio
Return of EquityReturn of Equity (ROE) is a measure of how efficient a company utilize its shareholder's equity to generate income. Shareholder's equity is also known as book value which is the difference between total assets and total liabilities.
Formula: Shareholder's Equity = Total Assets - Total Liabilities
Formula: ROE = Net Profit / Shareholder's Equity
Additional reading: ROE
Return of InvestmentReturn of Investment (ROI) is a measure of an investment performance. It is the percentage change in share price over a year with dividend yield.
Formula: ROI= (Current Share Price - Share Price last year + dividend) / Current Share Price x 100%
Additional reading: ROI
Current RatioCurrent ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities.
Formula: Current Ratio = Total Assets / Total Liabilities
Additional reading: Current Ratio
Quick RatioQuick ratio which is also known as the acid-test ratio is a type of liquidity ratio. It measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately.
Formula: Liquid Assets = Total Assets - Inventory - Prepaid expenses
Formula: Quick Ratio = Liquid Assets / Total Liabilities
Additional reading: Quick Ratio
Debt/Equity RatioDebt/Equity ratio is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. A company with high Debt/Equity ratio means it is highly leveraged and in turn pose higher risk.
Formula: Debt/Equity Ratio = Total Debts / Equity
Additional reading: Debt/Equity Ratio
LT Debt/Equity RatioLong Term (LT) Debt is a subset of total debt. High LT Debt/Equity Ratio is not preferable as it means quite significant of a company's resources is used to service interest payments for its debts.
Formula: LT Debt/Equity Ratio = LT Debts / Equity
Payout RatioPayout ratio refers to the percentage of earnings being paid out as dividend to shareholders. A very high payout ratio might not be desirable as it might be used by a company to mask out bad business situation or the company are not aggressively using its available resources to further expand its business.
Formula: Payout Ratio = Annualized dividend per share / Annualized EPS
Additional reading: Dividend Payout Ratio
PerformancePerformance refers to percentage change of share price over a period of time.
Today: Percentage price change from last trading day closing price
Week: Percentage price change from last week (7 days) closing price
Month: Percentage price change from last month (30 days) closing price
Quarter: Percentage price change from last quarter (90 days) closing price
Half: Percentage price change from last half year (183 days) closing price
Year: Percentage price change from last year (365 days) closing price
GapGap is the price difference between today's opening price to yesterday closing price. Big Gap usually indicates major news event pre-market opening.
Formula: Gap = (Today Opening Price - Yesterday Closing Price) / Yesterday Closing Price x 100%
Additional reading: Gap
Relative Strength IndexRelative Strength Index (RSI) is a momentum indicator which measures whether a stock has been overbought (RSI>70) or oversold (RSI<30). The logic is more to if a stock keep rising for past few trading days, there is higher chance of it to drop on subsequent days. In Stochie, 14 trading days period is being used.
RSI calculation is a bit complicated with a 2-steps process where the first RSI value from the first 15 days closing prices is calculated differently compared to subsequent RSI values (i.e. RSI for day 16 and onwards).
Formula: First Average Gain = Sum of Gains over the past 14 periods / 14
Formula: First Average Loss = Sum of Loss over the past 14 periods / 14
Formula: First RSI = 100 - 100 / (1 + First Average Gain / First Average Loss)
Formula: Subsequent Average Gain = ((Previous Average Gain) x 13 + Current Gain) / 14
Formula: Subsequent Average Loss = ((Previous Average Loss) x 13 + Current Loss) / 14
Formula: Subsequent RSI = 100 - 100 / (1 + Subsequent Average Gain / Subsequent Average Loss)
Additional reading: RSI
VolatilityVolatility is the degree of variation of a trading price series over time. Day traders who looking for quick and fast profits typically will select stocks with not only high volume but also high volatility. In Stochie, volaltility is standard deviation for closing prices for past 14 days.
Additional reading: Volatility
Average True RangeTrue Range (TR) refers to difference between last trading day price to today high or low (whichever is largest in term of absolute value) while Average True Range is the average of TR's over a given period of time. It measure volatility of a share and in Stochie, a period of 14 trading days is used.
Additional reading: Average True Range
SMASimple Moving Average (SMA) is the average value of closing prices for a trailing period of time. Some investors use the crossing of SMA lines with different trailing periods to determine whether a trend is reversing. In Stochie, a trailing time period of 20 days, 50 days and 200 days are provided.
Additional reading: SMA
High/LowHigh/Low is the highest and lowest price during a given period of time repectively. One use case is investors might want to get a list of stocks which are near to their 52-Week Low/High as it is not uncommon for stock to spike down or up once they past their 52-Week Low/High which is also known as breakout. In Stochie, a time period of 20 days, 200 days and 52 weeks are provided.
Additional reading: 52-Weeks High/Low
PatternTechnical analysis pattern is a study where investors try to predict future price of a stock by referencing to the past historical data of other stocks which exhibit similar trend. There are quite a number of universal accepted patterns such as head and should which indicate the stock price will drop further.
Additional reading: Technical Analysis Pattern
CandlestickCandlestick pattern is a movement in prices shown graphically on a candlestick chart that some believe can predict a particular market movement. The recognition of the pattern is subjective and programs that are used for charting have to rely on predefined rules to match the pattern. There are 42 recognised patterns that can be split into simple and complex patterns.
Additional reading: Candlestick Pattern