With over 750 stocks listed on Borsa Istanbul, finding the right investment candidates without a systematic screening approach is nearly impossible. Stock screening is the process of filtering a large universe using predefined financial criteria to narrow down your list of potential investments.
What Is Stock Screening?
Stock screening automatically filters hundreds of stocks based on financial metrics to identify candidates that meet specific criteria. The goal is to narrow the universe systematically rather than analyzing each stock individually. From professional fund managers to individual investors, everyone uses some form of stock screening.
Key Screening Criteria
The most commonly used metrics for BIST stock screening include: Price/Earnings (P/E) ratio — low P/E may indicate undervaluation; Price/Book (P/B) ratio — asset-based valuation measure; Return on Equity (ROE) — capital efficiency; Net Profit Margin — profitability; Revenue Growth (YoY) — growth trend; Debt/Equity — financial leverage. Combining these metrics creates a fundamental analysis screening profile.
Factor-Based Screening
In academic factor investing, screening criteria are more specific. momentum factor screening uses the 21-day Sortino ratio or 63-day price momentum. Value screening uses quarterly E/P (earnings-to-price) ratio — using the latest quarter rather than trailing twelve months provides a more current signal in Turkey's rapidly changing economy. Volatility screening uses 21-day annualized standard deviation.
Sector Filtering
BIST has over 37 sectors. Sector filtering is a critical tool for portfolio diversification. Banking stocks are sensitive to interest rates, industrial stocks to commodity prices, and retail stocks to consumer confidence. Sector-based filtering lets you select stocks aligned with your macroeconomic outlook.
Practical Screening Examples
High momentum factor screen: rank stocks with 21-day momentum > 0 and Sortino ratio > 0. Value screen: top 20 stocks by quarterly E/P, excluding negative earners. Low Risk screen: volatility 21d < 40% and 63-day momentum positive. Quality screen: ROE > 15%, net margin > 10%, debt/equity < 1. You can combine these filters for a multi-factor screen.
What to Do After Screening
Screening produces a shortlist, but screening results are not investment decisions by themselves. Review each shortlisted stock's detail page to evaluate financial statements, sector comparisons, and historical performance. Screening is the first step of the research process — not the last.
Related articles: Fundamental Analysis Guide, What Is P/E Ratio?, What Is P/B Ratio?, What Is Factor Investing?.
