How do I screen one?
Screening means filtering and classifying a stock systematically, rather than judging it on gut feeling. The best way to do this is to work through a fixed six-step process – from a quick pre-filter to sorting a company into analyse, watch, or exclude. This page shows you the basic framework – with no recommendations.
The 6-step process at a glance
The idea is that each step is more involved than the last. That way you spend your time first on the cheapest filter and only look more closely at the names that are worth it. In order, it looks like this:
- Quick test: a short pre-screening that checks whether a stock can be analysed at all.
- Stop-or-go / red flags: a look at clear warning signs that let a stock drop out early.
- Financial traffic light: placing the basic financial figures in context over time.
- Business model: understanding how a company earns its money and how robust that is.
- Valuation: tracing which assumptions are built into the price.
- Portfolio: recording the findings and putting them into your own context.
The order matters: filter broadly and cheaply first, then check narrowly and thoroughly. You can find the whole sequence with all the details here: the full process
The tools for it
So you don't have to apply the process from memory, there are four tools that help you with the individual steps. They make the approach repeatable and easy to follow:
- Quick test: guides you through the pre-screening in step 1.
- Stop-or-go: collects the typical red flags for step 2.
- Financial traffic light: structures the figures from step 3.
- Checklist: keeps your classification tidy so you can retrace it later.
You'll find all four tools together in the Toolkit
The goal is not a buy signal
The result of a screening is not a recommendation and not a „tip“. It is a clear classification into one of three categories: analyse (the basics are sound, a closer look is worthwhile), watchlist (almost everything fits, but one point is still open), or exclude (too much is missing to continue seriously). Passing a screening only says: a deeper analysis is worthwhile here.
Beware of a common fallacy: a low price is not undervaluation. Without context, a price is just a number – whether it is high or low only emerges from comparing it with what stands behind it. That is exactly what the later steps clarify, not the screening itself.
This page is for educational purposes only. It deliberately names no specific companies or people, and contains no buy or sell recommendation, no price targets and no investment advice. You make decisions independently and on the basis of your own research.