Finviz as a wellspring of knowledge
Finviz acts as a bus for many sources. It combines data from the Stock Exchange, Bloomberg, the Wall Street Journal Marketwatch, CNBC and other sources. When it all comes together, with every title you can see not only the base in the form of a graph but also the information about the given company and the latest news.To overcome the competition, Finviz offers basic technical analysis in addition to the fundamentals. Everything is in one place, and moreover, free. But how to know your way through all this information and how to recognize what is worth monitoring?
What stocks to monitor?
If you want to start completely blindly, there are two ways you can do so. The first is a detailed analysis, the second is a filter using Finviz maps. On the “map”, you can choose from options like1 Year Performance or Year To Date Performance. You can immediately see which stocks are rising or falling in the swing scale (weekly/ affiliate program vfxalert monthly).Finviz Performance MapPersonally, I would use this filter for a better overview of the market. It can also be said that this allows us to monitor the development of the economic situation. Finviz merges all shares into sectors, so it is immediately clear how technology, finance, healthcare, and other industries are doing.Based on this analysis, we can choose long-term increasing or decreasing shares and focus on them in individual analysis.Technical analysis could also help. The second option is to use a general filter.
Using Finviz filters
Finviz offers an incredible amount of filters. We cannot go through all of them in this article, however, we can and shall talk about the most famous and most important ones. So, let’s explain the indicators, talk about their ideal value, and take a look at how to choose the right shares to buy.Finviz FiltersThe Price-to-Earnings ratio, abbreviated as P/E or PE, or the ratio between the market price of a share and the net profit per share, is a fundamental indicator. It is similar to the moving average in technical analysis. P/E tells us how much the investor is willing to pay for the company’s profits.If the price of a share is $ 60 and the company’s earnings per share are $ 3, then the P/E will be at 20 (60 divided by 3). In this case, the investors are obviously willing to pay $ 20 for every single dollar of the company’s profits.The classic P/E indicator measures the current share price with a profit for the last 12 months. There is also the forward P/E indicator, which measures the current price with the expected profit in the following year.
What is the ideal P/E ratio?
In other words, the P/E ratio tells us how many times the market share price is higher than the earnings per share. Logically, we want the highest profit for the least money possible. But that can be risky.Tobias Levkovich of Citigroup tested the empirical dependence of P/E and stock price developments in the S&P 500 index. This analysis found that with only a few exceptions, the best ratio was between 14-16.p-e-historyAverage historical P/E on the US stock marketP/E offers quick information, but we do not recommend trading purely on its basis. Last year’s profits may no longer reflect reality and forward P/E works with estimates. P/E ratio is good but has limited possibilities and should be supplemented with additional data.
Market Capitalization (Market Cap.)
Market Capitalization is another parameter you should not miss. Higher growth potential is best found in smaller companies, while stability is best found in larger ones.What is the probability that Apple shares will multiply its value in the next 2 years? Close to zero. However, with smaller companies,it’s in the realm of possibilities.In terms of calculation, market capitalization is equivalent to the price of one share multiplied by the total number of shares.The company is considered a big company on the US Stock Market if its market capitalization crosses over $ 10 billion. The medium-sized company is between $ 2-10 billion, while those under $ 2 billion considered small companies.