Introducing Valuation Models! 
Finding undervalued stocks can be one of the best ways to generate strong returns. The right stock has the potential to change an investor’s life!
But with thousands of public companies out there, spotting the true bargains isn’t easy.
That’s where stock screeners come in. They help you cut through the noise by filtering over 100,000 companies down to just the ones with the financial traits that signal undervaluation, whether it’s low valuation multiples, strong free cash flow, or improving margins the market hasn’t yet priced in.
Below, we’ve outlined 5 of the best stock screeners you can build using TIKR. Each screener includes the exact filters to use, strategy insights, and why the approach works.
Let’s dive in!
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Screener #1: Undervalued Compounders
This screener looks for companies that are both cheap and growing. By combining a low forward P/E ratio with strong earnings growth, it targets stocks that the market hasn’t fully appreciated yet.
These businesses are often stable, overlooked companies compounding earnings quietly while trading at single-digit multiples.
Example Stocks: Alibaba, Merck, Cigna, Dell Technologies
Why This Strategy Works
- Combines value with growth: Avoids value traps by focusing on cheap stocks that are still compounding earnings.
- Ignored by the market: These businesses often lack hype, which creates pricing inefficiencies.
- Built-in downside protection: Low forward P/E provides a cushion if growth slows.
- Backed by academic research: Studies show low P/E stocks with solid fundamentals tend to outperform.
- Perfect for cautious optimists: Offers upside potential without overpaying for hype.
Key Filters:
- Forward P/E: Less than 13
- EPS Growth (Consensus, 2-Year CAGR): Over 10%
- ROIC: Over 10%
- Optional: Exclude Financials and Materials
- Optional: Country = USA
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Screener #2: Ben Graham Bargains
This is a classic value investor’s screener with a twist.
By screening for low Price-to-Book ratios, you’re targeting stocks trading below the value of their net assets.
But to avoid buying stocks that are “cheap for a reason,” we’ll add a return on equity (ROE) requirement to look for high-quality stocks. That ensures you’re only seeing asset-rich companies that are putting capital to work efficiently.
Example Stocks: Suzuki Motor, Geely Automobile, Kansai Electric Power Company
Why This Strategy Works
- Targets real assets at a discount: Low price-to-book stocks offer exposure to businesses trading below their net worth.
- Filters for quality: High ROE ensures you’re not just buying broken balance sheets.
- Timeless approach: Inspired by Ben Graham, but updated for modern markets.
- Emphasizes capital efficiency: Companies generating strong returns on equity are often better long-term bets.
- Great for disciplined investors: Best suited for those willing to wait for value to be realized.
Key Filters:
- Forward Price-to-Book: Less than 1.5
- Return on Equity (LTM): Over 15%
- ROE Growth (2020–2024 CAGR): Positive
- Optional: Exclude Financials
Screener #3: Undervalued Cash Machines
This screener highlights companies producing strong free cash flow relative to their valuation, with pricing power from their high gross margins.
These businesses also tend to have operational efficiency and capital discipline, which are great qualities to look for in long-term compounders.
Example Stocks: NVIDIA, Apple, Meta Platforms, Broadcom
Why This Strategy Works
- Focuses on real profitability: Free cash flow is a better measure of financial health than earnings.
- Highlights financially stable companies: Low debt ensures these businesses can weather downturns.
- Favored by quality investors: FCF machines are often long-term compounders.
- Defensive upside: High FCF yield stocks tend to outperform in uncertain markets.
- Great for capital preservation: Ideal for investors who want both safety and upside.
Key Filters:
- Levered Free Cash Flow Margin (LTM): Over 8%
- LFCF Margin CAGR (2020–2024): Positive
- Gross Profit Margin (LTM): Over 40%
- Optional: Country = USA
- Optional: LFCF Margin < 99% (to remove outliers)
Find undervalued stocks with high cash flow quicker with TIKR (It’s free) >>>
Screener #4: The Biggest Losers (That Might Be Winners)
This screener finds companies that have seen sharp price declines over the past year, but are still growing earnings.
This disconnect between a falling share price and improving fundamentals may signal that the stock is underpriced.
However, it’s also important to make sure that the underlying business fundamentals are still strong, as many of these stocks have fallen for a reason and may not fully recover.
Example Stocks: Celanese Corp, Abercrombie & Fitch, Onto Innovation, American Eagle Outfitters
Why This Strategy Works
- Captures mispriced fear: Stocks down 30%+ are often victims of overreaction, not declining fundamentals.
- Backed by improving results: Ongoing earnings growth points to resilience.
- Follows a contrarian blueprint: Similar to strategies used by Warren Buffett, John Templeton, and Seth Klarman.
- Asymmetric reward potential: Small positive surprises can drive big rebounds in sentiment and price.
- Ideal for bold investors: Designed for those willing to zig when others zag.
Key Filters:
- 1-Year Stock Price Return: Down 30% or more
- Revenue Growth (3-Year Consensus CAGR): Positive
- EBITDA Margin YoY Growth (FY2024): Positive
- Optional: Market Cap > $1B
- Optional: Country = USA
Find undervalued stocks quicker with TIKR (It’s free) >>>
Screener #5: Quiet Climbers
This screener finds companies whose fundamentals are improving but whose valuation has yet to catch up. Specifically, it looks for stocks that have fallen in price, but have improving fundamentals.
It’s a great way to spot businesses with operational tailwinds that the market has yet to re-rate.
Example Stocks: Apple, Novo Nordisk, Salesforce, Fiserv
Why This Strategy Works
- Uncovers early inflection points: Expanding margins signal internal improvements before Wall Street catches on.
- Valuation hasn’t caught up: Below-average P/E means you’re buying in before sentiment turns.
- Quiet operators with momentum: These companies are often under-followed despite improving fundamentals.
- Upside through multiple expansion: As margins improve, valuation multiples tend to follow.
- Ideal for forward-looking investors: Perfect for those hunting tomorrow’s winners at today’s prices.
Key Filters:
- YTD Stock Price Return: Less than -15%
- EBITDA Margin YoY Growth (FY2024): Positive
- Revenue Growth (FY+1): Positive
- EPS Growth (Consensus, 2-Year CAGR): Over 5%
FAQ Section:
What is a stock screener?
A stock screener is a tool that lets you filter thousands of companies based on specific financial criteria like valuation multiples, revenue growth, or profitability metrics.
How do I use a stock screener to find undervalued stocks?
You can filter for traits like low P/E or EV/EBIT, high free cash flow yield, or improving margins. These help surface stocks trading below their intrinsic value.
What are the most important metrics to screen for undervaluation?
Common filters include Forward P/E, Price-to-Book, EV/EBIT, Free Cash Flow Yield, and ROIC. Combining valuation and quality metrics helps avoid value traps.
Can I create these screeners with TIKR?
Yes. TIKR’s stock screener includes global coverage, forward estimates, and custom financial filters — so you can easily build and save undervalued stock screens.
Do these screeners guarantee good investment results?
No. Screeners are a starting point. They help narrow your list, but deeper research is still needed to evaluate the company’s risks, management, and long-term potential.
TIKR Takeaway
By using the right stock screeners, you can find undervalued stocks that align with your personal investing strategy.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks, so if you’re looking to find the best stocks to buy for your portfolio, you’ll want to use TIKR!
TIKR offers institutional-quality research for investors who think of buying stocks as buying a piece of a business.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold any positions in the stocks mentioned in this article. Thank you for reading, and happy investing!
