TradingView’s Stock Screener offers a comprehensive set of metrics that help traders and investors make well-informed decisions. By analyzing key performance indicators, you can identify growth potential, financial health, and overall stability in stocks.
In this article, we’ll explore the top metrics to focus on when using TradingView’s Stock Screener and how these metrics can guide your investment decisions.
Valuation Metrics
Valuation metrics are essential for evaluating whether a stock is overpriced or undervalued compared to its intrinsic value. Key valuation metrics available in TradingView’s Stock Screener include:
- Price-to-Earnings Ratio (P/E Ratio): This metric helps investors assess how much they are paying for each dollar of earnings. A low P/E ratio could signal that a stock is undervalued, whereas a high ratio may indicate it is overvalued.
- Market Capitalization: This refers to the total market value of a company’s outstanding shares. It’s a good measure of the company’s size and helps categorize stocks as large-cap, mid-cap, or small-cap.
- Enterprise Value (EV): This metric factors in not only a company’s market cap but also its debt and cash. It provides a broader picture of the company’s valuation.
Also Read: Key Metrics to Watch in TradingView’s Stock Screener
Profitability Metrics
Profitability metrics assess how well a company utilizes its resources to generate earnings. These metrics are essential for evaluating a company’s capacity to sustain and expand its operations.
- Return on Equity (ROE): ROE evaluates how efficiently a company turns shareholders’ equity into profits. A higher ROE reflects stronger profitability.
- Net Margin: This metric measures a company’s profitability as a percentage of total revenue. A higher net margin shows that a company is more efficient at converting revenue into actual profit.
- Operating Margin: This measures a company’s operating income as a percentage of revenue, providing insight into the profitability of its core operations.
Growth Indicators
Growth indicators provide valuable insights into a company’s performance over time. By analyzing growth trends, investors can identify stocks that have strong potential for future earnings.
- Annual Year-over-Year (YoY) Growth: This metric shows how much a company’s revenue or earnings have grown over the past year, which helps assess the company’s growth trajectory.
- Quarterly QoQ Growth: Analyzing growth from one quarter to the next can provide more immediate insights into the company’s recent performance.
- EBITDA Growth: EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) growth is a key metric that reflects the company’s operating performance and financial health over time.
Margin Indicators
Margin indicators highlight a company’s efficiency in generating profits from its operations. These metrics are useful for comparing companies within the same industry.
- Gross Margin: This metric reflects the portion of revenue remaining after deducting the cost of goods sold. A higher gross margin suggests that the company retains a larger share of its sales revenue.
- Operating Margin: As mentioned earlier, operating margin measures the profitability of a company’s core business operations, excluding taxes and interest.
- Free Cash Flow Margin: This metric shows how much cash a company is generating relative to its revenue. Positive free cash flow indicates that a company has sufficient cash to expand, pay dividends, or reduce debt.
Return on Capital Metrics
Return on capital metrics measure how effectively a company is using its capital to generate profits. These metrics provide insights into the company’s long-term financial health and efficiency.
- Return on Invested Capital (ROIC): ROIC measures the return a company earns on its capital invested in the business. It’s an important metric for evaluating how well management is using company resources to generate returns.
- Return on Tangible Equity (ROTE): This metric measures how effectively a company is generating returns from its equity after accounting for intangible assets like goodwill.
Debt Management Metrics
Assessing a company’s debt levels is vital for evaluating its financial risk. Debt management metrics enable investors to determine the company’s ability to meet its financial commitments.
- Debt-to-Assets Ratio: This metric measures the proportion of a company’s assets that are financed through debt. A lower ratio indicates less risk.
- Total Debt-to-Capital: This ratio indicates the percentage of a company’s capital that comes from debt. A lower ratio means the company relies less on borrowing.
- Net Debt-to-EBITDA: This metric indicates the time required for a company to repay its debt, assuming both the debt and EBITDA stay unchanged.
Dividend and Shareholder Metrics
For income-focused investors, dividend metrics provide insight into how much a company returns to its shareholders through dividends.
- Dividend Yield: This metric measures the annual dividend payment relative to the stock price. A higher yield indicates a company’s ability to generate income for its shareholders.
- Dividend Per Share Growth: Investors can track how a company’s dividend payments have grown over time, providing insights into its financial stability.
- Buyback Yield: This metric shows how much a company is spending to repurchase its own shares. Companies with high buyback yields are typically considered shareholder-friendly.
Security and Forecasting Metrics
TradingView’s Stock Screener also includes security-related metrics that help traders anticipate future stock movements.
- Target Price: This metric represents the price level analysts believe the stock will reach in the future, offering a forecast for future price movements.
- Target Price Performance: This shows the percentage difference between the current stock price and the forecasted target price, providing a glimpse into potential stock price appreciation.
Conclusion
TradingView’s Stock Screener offers a wealth of metrics that can assist investors in evaluating and selecting the best stocks for their portfolio.
From valuation and profitability to growth and debt management, these metrics provide a well-rounded view of a company’s financial health.
By leveraging these key metrics and applying filters in TradingView’s screener, you can better identify growth stocks and make data-driven investment decisions.
