There are many investors who go it alone. They do their own research and make trades through a low-cost broker. These investors are to be congratulated for their entrepreneurial spirit, but the problem is that sometimes, these brave folks don't know where to begin or, more specifically, how to screen for stocks.

To select an individual stock, you first need a good source of prospective buys. This is where up-to-date stock screeners and market data can prove quite useful to you.

Understand the Value of Timely Market Data

You'll need as much information as possible about market conditions. This means tapping into a variety of sources for economic, industry, and company-specific information. To be clear, you shouldn't need to delve into statistics and the intricacies of every industry the same way Wall Street analysts do, but you do need to have a good grasp of what is driving the market.

Therefore, watching business reports via various media channels, reading news on financial websites, and tracking investor sentiment on social media are highly recommended. Savvy investors should be on the lookout for data and events that will drive the economy going forward. Obtaining information from a wide cross-section of sources will ensure that you aren't receiving a biased or incomplete news flow.

In terms of news, these are some examples of the types of information investors should tap into o♎n a regular basis.

Interest Rates

Information on interest rate trends, or the likelihood of a future rate hike or cut, is extremely valuable. If you can properly anticipate the like🐠lihood of future rate cuts and increase your exposure to domestic equities, you stand to generate some returns.

Again, this is why a timely, thoughtful analysis of economic news is important. Some investors enjoy business television channels like CNBC, Bloomberg, or Fox Business, but the best way to do this is to read the releases from the Fed yourself, think cri♒tically about them and what they mean for the markets, and then listen to the🐟 "experts" featured on these outlets for additional insights.

Oil & Energy 

Information on OPEC oil production and domestic inventory stockpiles is equally important. Why? The simplest answer is that our economy and future 𝄹growth prospects depend on the ability to source oil at a reasonable price. This makes the supply/demand equation extremely important.

Again, you should read the reports yourself, such as the , the Annual Energy Outlook, and the International Energy Outlook. OPEC's highli✨ghts everything going on in the oil industry globally.

Once you finish your reading, turn to the financial media to help you gain additional 𒊎insights.

Economic Indicators

Next, consider consumer sentiment numbers, housing starts, and employment figures. The Bureau of Economic Analysis and Bureau of Labor Statistics publish reports on inflation, employment, gross domestic product, outlooks, and much more that can help you learn what's going on in the economy. The University of Michigan publishes an excellent report about consumer sentiment, which has been picked up by the Federal Reserve Bank of St. Louis' FRED system.

While these data sets primarily provide 澳洲幸运5开奖号码历史查询:lagging indicators of the economy, they give a sense of what the broader publ༒ic is thinking and how they are spending their money. This is important data because it allows you to view a trend and gauge consumers' willin💫gness to spend money on certain items in the near future.

As an example of using this data, if consumer sentiment is high꧙, housing starts are steadily increasing, and unemployment is down, one might properly ✨assume that higher-end retailers will fare better. Conversely, when all those indicators are flipped, a reasonable assumption would be that lower-end retailers would fare better.

Learn the Types of Companies to Avoid

The ✨trick to proper stock selection is being able to narrow down a number of potential investments to a few viable candidates. This can best be accomplished by knowing which types of companies to avoid.

Except in unusual circumstances, you should generally steer clear of distributors, commodity-type businesses, secon🍃d-class businesses, businesses with low margins, those with a low trading volume, and acquiring companies.

Distributors or Commodity-Type Businesses

Since these companies aren't manufacturers, they are merely 澳洲幸运5开奖号码历史查询:intermediaries who rarely have any unique qualities that would draw large numbers of investors. Additionally, there is often less of a barrier to comp🌳etition when it comes to becoming a distributor.

Examples of such businesses would be makers of children's stuffed animals (non-specialized toys are a well-known commodity) and consumer electronics distributors that simply ship goods to retailers. These businesses could easily see their profits shrink if they lose even one sizable retail account or if the manufacturer finds a different distributor to ship the goods for less.

Gross Margins Below 20%

The most basic reason for this is that there is almost no margin for error. In fact, even the slightest downtick in business could send profits plunging. Typically, commodity-type businesses and distributors carry low margins. But so do certain start-ups that need to offer their goods and/or services at a lower cost in order to gain market share. Again, all of these compꦇanies are inhereꦉntly "riskier."

Not Considered "Best in Class"

Like your parents always said, "You get what you pay for." In other words, second-tier companies often remain second-tier companies unless they have an obvious potential to one day become an industry top dog. How can an investor tell whether a company is "best in class?" Odds are it will have the largest 澳洲幸运5开奖号码历史查询:market capitalization in the business, the largest presence in terms of geographic footprint, and will tend to be🐟 a "trendsetter" in the industry (in terms of price, technology, and product offerings) in which it operates. Walmart, Apple, and Amazon are good examp♛les of such companies. 

Thinly Traded

Thinly traded means that these companies generally only trade fewer than 100,000 shares per day. The market or "spread" for these types of stocks is often extremely volatile. Sharp swings in supply and demand and the potential impact on the share price are just too hard to gauge, even for a seasoned investor.

Companies That Have Announced an Acquisition

Companies that take on big 澳洲幸运5开奖号码历史查询:acquisitions often end up reporting large, unforeseen expenses that can put a big damper on near-term earnings. Again, while such a deal could present an e🍒normous opportuꦑnity, the downside potential is far too often overlooked.

Manhattan Bagel is a terrific example of this. In the late nineties, the nationally known bagel chain bought one of its biggest rivals on the West Coast. But it turns out there were accounting problems, and the stores that the company bought didn't turn out to be nearly as profitable as it (or investors) had initially hoped. Because the acquisition was so huge, Manhattan Bagel couldn't weather the problems and was eventually forced to file for bankruptcy protection.

Learn to Identify Successful Companies

There are a number of characteristi🐎cs that successful co♊mpanies tend to have.

Accelerated Sales and Earnings Growth

Look for companies that are growing their top and bottom lines in excess of 15%. Why this threshold? It's because this is the benchmark that many institutions look for prior to getting into a stock.

Of course, keep in mind that companies that grow at a faster pace often have trouble ma𓃲intaining their growth after a few years, and are more likely to disappoint investors. Ideally, a range between 15% and 25% is the most desirable.

High Levels of Insider Buying

Insider buying is a great indicator that a company may be undervalued. Why? Because while some senior executives may buy shares simply to demonstrate their faith in the company, the lion's share buy company stock for just one reason: to make money.

Look specifically for companies where several insiders are buying at or near the current market price. A terrific source for insider data is the 澳洲幸运ꦐ5开奖号码历史查询:Securities an𝄹d Exchange Commission (SEC). However, other non-governmental sources also offer good data on this subje🌄ct, including Finviz and Morningstar. 

Companies Showing a Solid Chart

While 澳洲幸运5开奖号码历史查询:technical analysis shouldn't be a major factor in the stock selection process, it does have its role. Ideally, investors should be on the lookout for a company that is steadily advancing in price on higher volume. Why? Because stocks that advance on increasing volume are under accumulation. In other words, there is a broad-based momentum in the stock that is likely to continue to bring it to new levels. Picture t🎀he trajectory of an airplane taking off; that's what you are looking for!

Also, you may want to look for stocks that are making new highs. Often companies that are breaking through (or have already broken through) technical resistance levels have recently experienced some positive fundamental improvement that is draಌwing attention to the stock.

Buy What You Know

Legendary investor 澳洲幸运5开奖号码历史查询:Peter Lynch was famous for saying that all investors should e💦ither use or be very familiar with the products/companies they invest in. While this may sound like common sense, many investors tend to ignore this timeless advice. 

What's the advantage of buying what you know?

Investors with intimate knowledge of the products and the companies they buy 🌄can better understand their growth potential. Incidentally, it also makes it easier for them to predict future saleꦡs and earnings growth and/or to compare their product offerings with those of other industry participants.

Pay Attention to Financials

You should always review the three financial ꦍstatements (income statement, balance sheet, and cash flow statement) of the companies you invest in.

Specifically, you should be on the lookout for:

Inventory Growth in Proximity to Revenue Growth

Companies wh🅠ose inventories grow at a faster rate than their sales are more likely to be caught with obsolete inventory at a lꦑater date if sales growth suddenly slows.

Accounts Receivable Growt💝h in Proxi♋mity to Sales Growth

Companies whose accounts receivable are growꦕing at a faster clip than sales may be having trouble col꧒lecting debts.

Tangible Liquid Assets

Companies with a large amount of cash and other tangible (hard, liquid) assets tend to be more solid than those that do not. A laಌrge amount of cash and other liquid assets will provide the company with the means to pay its short-term debts and service its longer-term notes even in difficult times. However, companies can carry too much cash, so be o🀅n the lookout for excess cash.

The Bottom Line

Knowing how to screen for stocks and specifically what to look for is a major battle for most investors who go 💙it alone. The tips provided here should serve as a starting point. If you take it slow, create criteria and a plan, and follow them, you will learn to screen for stocks and hopefully generate returns for your efforts.