I’m going to show you the best penny stock screener on the web. The best part of all is that it’s free for all the basic features I’m going to show you and it only costs money if you want the advanced features.
Penny Stock Screener Software
Finding the best penny stock screener software though is only half the battle. You need to have a stock trading system in place where penny stock scanners are part of a much larger strategy.
Best Penny Stock Screener Free
The best penny stock screener is free. The reason this penny stock screener is free is that Finviz is hoping to sell you on their full product for a small monthly fee. No problem. Once you start using this penny stock screener, you can always upgrade once you make a ton of money with it. I appreciate businesses like Finviz that give away something for free so that you can make sure it works for you before deciding if you want to spend money on it.
First, sign up for a free account on Finviz by clicking here. Click on the “Register” link in the upper right hand corner. Come back to this lesson after you register for a free account.
After you register for a free account on Finviz. Log in to that account. After you log in, click on Screener on the bar across the top of the window.
Click on the All button in the filters section. See the image below. Click on the image to see it in full size. Copy everything you see in yellow into your corresponding boxes so that it looks exactly like what you see in the image below:
Best Penny Stock Screen
This is the best penny stock screen I have ever seen. If you want to know how to scan for penny stocks then you just found your ultimate answer. Let’s go into what these settings actually are because you might want to tweak them a little to fit your wheel house of stocks that you like to go for.
Market Capitalization = Market capitalization (or market cap) is calculated by taking the current share price and multiplying it by the number of shares outstanding. It is a great way to measure the size of a company although you need to be on the watch for abnormal valuations as the result of share dilution that often occurs in penny stocks. The reason we are using market cap in our best penny stock screen settings is that small companies grow faster than large companies. A small company can double its sales year over year. It’s unlikely that a large cap company like Microsoft will ever be able to double their sales year over year. I have set market cap at over $50 million because I like companies that are a little larger than your average penny stock. If you want straight up penny stocks though, you can change the setting to “Nano” which are stocks with a market cap of less than $50 million.
Beta = Beta measures volatility in a stock. It measures how much the stock moves when compared to the market as a whole. A beta of less than 1 means the stock will be less volatile than the market. A beta of 1 means the stock moves with the market. A beta of greater than 1 means the stock is more volatile than the market. So if a stock’s beta is 1.5, it means that the stock is 50% more volatile than the market. The reason we use beta in our best penny stock screener is that we want a stock that can really move. The last thing we want is to buy into a dead penny stock that just goes sideways with little volatility. I have set beta to greater than 0.5 but you might want to set beta greater than 1 or even 2 if you want to find really explosive stocks. The reason my beta is lower is that I’ve noticed that penny stock’s beta can really fluctuate from day to day. A penny stock might have a beta of 1.5 but two days later it drops to 0.9. If I set the beta too high, the stock disappears off my screen too quickly. Feel free to explore with a higher beta setting.
Price = It’s pretty obvious why I set the stock price to be under $10. If you want the best penny stock screener to just list true penny stocks, you can set the price to “Under $1”.
Debt/Equity = The Debt/Equity ratio is calculated by dividing total liabilities by stockholders’ equity. The lower the debt to equity, the less debt and more cash a business has. I like companies with a mountain of cash and little or no debt. Companies with a lot of cash and no debt are companies that have a proven business model and that are well ran. It is the Warren Buffett trading strategy known as “value investing”. Penny stocks with a lot of cash and little debt have options. They can use that cash to acquire other companies. They can use that cash to buy patents. Never forget, cash is king. Companies with a lot of cash and little debt are also attractive acquisition targets by larger companies. If you are in a penny stock that gets bought out by a larger corporation, you can become rich overnight.
Volume Penny Stocks
Average volume = The average number of shares traded each day. You can buy the best penny stock in the world but if no one else is buying it (volume) because they don’t know about it, it will never go up the charts. Some penny stock companies will hire known penny stock promoters to pump the stock. You should stay away from those penny stocks because it’s nearly impossible to time when the dump will begin after the pump. I recommend penny stocks that trade at least $1 million dollars worth of volume a day. Thus, if the stock is trading for $2 a share, it should have an average daily volume of 500,000 shares or greater. Volume is often referred to as liquidity where higher liquidity stocks are stocks that are easier to trade in and out of. Volume is very important because you don’t want to get stuck in a low liquidity POS penny stock that doesn’t go anywhere. I set the volume at greater than 500,000 but if you are trading penny stocks under $1, that number should be higher.
Sub Penny Stock Screener
I do not recommend a sub penny stock screener that screens for stocks under $0.01, like stocks that are $0.005 and so on. The reason is that once a stocks gets close to $0.01, it can be boxed in by market makers who will short the stock, knowing that the company will being going bankrupt. It can also be a scam stock where the owners have issued more and more shares, to raise money to pay themselves at the expense of shareholders, so much that they’ve destroyed the very share structure. Remember, there’s usually a good reason that a stock is trading under $0.01 per share. A stock that’s not even worth a penny is not even a penny stock anymore but rather a sub penny stock. A stock that’s not even worth a penny is a stock that’s probably not worth owning.
Frequently Asked Questions about Best Penny Stock Screener
What does a stock screener do?
A stock screener does what is impossible for a human to do. It scans tens-of-thousands of stocks for the criteria that are entered into the screener. The resulting output can then be used to generate a master watch list.
What is the best stock screener online?
The best stock screener online is Finviz. Finviz lets you enter both fundamental data (P/E, Price/Cash, EPS, Return on Equity, Debt/Equity, Gross Margin, etc.) and technical data (RSI, Volatility, Pattern, Candlestick, Beta, etc.) in real-time to find the best stocks.
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