My Preferred Stock Screener

How do we select which stock to invest in Bursa Malaysia? This is a question that has not a single answer. In the end, it is all up to you. You need to develop your own criteria for stock selection. What I can do is to show you how I select my stock. Here I am assuming that you are an investor and not a speculator.

Out of so many companies in Bursa Malaysia, how do we filter out the potential counters which fit our criteria? We cannot possibly screen the companies one by one as it is too time consuming. That is where a stock screener comes to help. What is this stock screener?

Quoting Investopedia,

“A stock screener is a tool that investors and traders can use to filter stocks based on user-defined metrics. Stock screeners exist either for free to a subscription price on certain websites and trading platforms. They allow users to select trading instruments that fit a particular profile or set of criteria. For example, users are able to screen for stocks by their price, market capitalization (market cap), price-to-earnings or P/E ratio, dividend yield, 52-week price change percentage, average volume, and average five-year return on investment (ROI), among others.

Some trading platforms and software allow users to screen using technical indicator data. For example, one could filter for stocks that are trading above their 200-day moving average or whose Relative Strength Index (RSI) values are between a specified range.

(Investopedia Definition Link)”

Stock screener is such a tool that allows us to filter stocks based on our criteria. I am currently using Financial Times Equity Screener (Link).

My recommended stock screener – Financial Times Equity Screener

So how do we use this screener? In the Find a company section, we can see three options: Country, Sector & Industry and Equity attributes. First, we need to select the country. As we are interested in Malaysia only, in the Region column, select Asia Pacific. Then in the Country column, select Malaysia. You may choose other country if you want to.

After that, we can select the sector and industry that interest us. Normally I would leave it unticked unless I have a clear sector that I want to invest in. Lastly, we have to select the equity attributes to filter the stocks. The default criteria are Market Cap, Beta (5 year), Dividend Yield (%) and Consensus Forecast. I will remove everything except for Dividend Yield. Then I will just select two criteria: Price to Earnings Ratio in the Default Criteria category and Return on Average Assets (ROAA) in the Management Effectiveness category.

Why do I choose these two specific criteria only? These criteria are based on the book by Joel Greenblatt titled The Little Book that Still Beats the Market. You should give it a read.

For the Price to Earnings Ratio, I set the minimum as 5 and leave the maximum blank. As for the ROAA, the minimum is 20 or 25 and the maximum is again blank. After everything is set, click the Go button.

A list of results will be generated on the same page. However, I always get duplicate results. One company may come out as many as three times. That is a glitch that I do not know how to fix.

Ranking the stock

With the results at hand, I proceed to rank the companies by price to earnings (P/E) ratio and ROAA. The ranking by P/E ratio starts from lowest to highest while the ROAA is from highest to lowest. After I get the rankings of both criteria, the ranks for both criteria of the same company are added together. This will be the final score of that specific company. Again, sort them from lowest score to the highest score. The company at the first position on the list is supposed to be the best candidate to check out but this is not always true. Theoretically, every company which makes the list is a potential quality investment.

As I am a long term investor, I look for companies that pay generous dividend. Hence I want to the check the dividend yield of each company. After the sorting, I will pick a few companies that interest me and browse through their annual reports. Only after I am confident with a company, I will proceed to buy its shares.


Remember, screener is a great tool but it just helps to filter. We should be the one to make the final decision. Do not simply buy a stock from a list of companies that fulfil your screening criteria.

Do you have your own preferred screener too? You can share it with us in the comments section below.

Recommended book

If you are interested in The Little Book that Still Beats the Market, you may get the book from The Book Depository through the link below*.

*Disclosure: The above link is Involve Asia affiliate link. Thus, I may earn a small commission when you purchase the book through this link.


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