Good ole Warren Buffet started his career as a Value Investor. He looked for companies that made money, had low debt and could be somewhat easily liquidated if needed.
Today we can scan for these same undervalued stocks using Finviz.
To me an undervalued stock is anything selling below where it should be based on Assets, Revenue and Debt. How much money does the company make, verses how much is paid out each year to take care of all the debt.
Only after digging into the balance sheet and understanding the type of business will you know for sure if the company you’re looking to invest in is truly an undervalued stock.
Finviz Scan for Undervalued Stocks
P/E: Under 5
Return of Equity: Over +20%
Debt/Equity: Under 0.5
Current Ratio: Over 2
P/E: Under 5 means we’re scanning for stocks with a current price level under the possible earnings potential. The P/E Ratio is calculated by taking the current stock Price and dividing it by the Earnings per share. The P/E ratio is used to determine how much someone would pay for a stock relative to its actual earnings.
Return of Equity Over +20% scans for stocks that return at least 20% back to the share holders. Instead of a loss, these stocks produce gains.
Debt/Equity Under 0.5 looks for stocks with low debt ratios. Stocks that have the capacity to bring in more revenue then debt.
Current Ratio Over 2 scans for stocks that are able to pay their obligations. It looks at a companies Assets versus its Liabilities.
This scan is a good starting place to find stocks that are worth looking into. Its all about finding the right stock, then waiting on the right time.
If this Finviz Scan for Undervalued Stocks helped you, let us know below.