How to Screen for Value Stocks

Screening for value stocks is the process of using quantitative filters — such as P/E ratio below 15, price-to-book below 1.5, and return on equity above 10% — to systematically find stocks trading below their intrinsic value. It’s the data-driven way to apply value investing principles made famous by Benjamin Graham and Warren Buffett.

Value investing has produced some of the greatest long-term track records in market history. But finding undervalued stocks among 26,000+ publicly traded companies is like searching for a needle in a haystack — unless you use a stock screener.

A well-built value screen replaces hours of manual financial statement analysis with a structured, repeatable filter that surfaces candidates in seconds. You define what “cheap and high-quality” looks like, and the screener finds every stock that fits.

TL;DR: Value stock screening combines valuation metrics (P/E, P/B, Price/FCF), quality metrics (ROE, profit margins), and financial health filters (debt-to-equity, current ratio) to find stocks the market has underpriced. This guide walks you through building a value screen on ScreenerHub — from choosing criteria to interpreting results and monitoring your picks over time.

What Makes a Stock a “Value Stock”?

A value stock is a company whose current market price is lower than what its fundamentals suggest it’s worth. The gap between what you pay and what the business is actually worth is called the margin of safety — the core principle behind value investing.

Value stocks typically share these characteristics:

• Low valuation multiples — P/E, P/B, or EV/EBITDA ratios below market or sector averages
• Solid fundamentals — consistent profitability, manageable debt, positive cash flow
• Market neglect — the stock is cheap because it’s boring, out of favor, or overlooked — not because the business is broken
• Catalysts for revaluation — some event or trend that could push the price closer to intrinsic value

The key distinction: a value stock is not the same as a cheap stock. A stock trading at $3 with collapsing revenue is cheap for a reason. A stock trading at 10x earnings with 15% ROE and growing cash flow — that’s the kind of opportunity value screening is designed to surface.

The 5 Categories of Value Screening Criteria

Every value stock screen combines filters from these five categories. Think of them as layers — each one narrows the list from a different angle.

1. Valuation — “Am I paying a fair price?”

These metrics compare a stock’s market price to a financial anchor: earnings, book value, cash flow, or revenue.

No single valuation metric is enough. A stock can have a low P/E because earnings are inflated by a one-time event. Using two or three valuation filters together gives you a more reliable signal.

Tip: On ScreenerHub, you can combine multiple valuation filters in one screen. Start with P/E and Price/FCF — together they catch stocks that are cheap on both an earnings and a cash flow basis.

2. Profitability — “Is this a good business?”

Cheap stocks aren’t valuable unless the underlying business generates real profit. Profitability filters separate bargains from traps.

3. Financial Health — “Will it survive a downturn?”

Value stocks often sit in unloved corners of the market. You need to make sure they’re cheap because of market sentiment — not because they’re heading for bankruptcy.

4. Cash Flow — “Is the earnings quality real?”

Earnings can be inflated by accounting choices. Cash flow doesn’t lie.

5. Size and Stability — “Is it large enough to be safe?”

Micro-cap stocks can look like value plays but carry liquidity risk and information gaps. A minimum size filter keeps your screen in investable territory.

3 Proven Value Screens You Can Build Today

Here are three classic value approaches — each with the exact criteria you can plug into ScreenerHub’s Screener Studio. They go from conservative to aggressive.

Screen 1: The Graham Classic

Inspired by Benjamin Graham’s The Intelligent Investor — the book that defined value investing.

Philosophy: Buy companies whose stock price is modest relative to both earnings and book value, with strong enough balance sheets to weather storms.

Expect: 10–40 results depending on market conditions. In expensive markets, this screen may return very few stocks — and that’s the point. Graham’s criteria are deliberately strict.

Best for: Conservative, long-term investors who want a wide margin of safety.

→ Try the Graham Classic screen on ScreenerHub

Screen 2: Quality Value (Buffett-Inspired)

Warren Buffett evolved Graham’s approach: he pays a fair price for wonderful businesses rather than the cheapest price for any business. This screen adds profitability and margin requirements.

Philosophy: Great businesses at reasonable prices beat cheap businesses at rock-bottom prices. The ROE and margin filters ensure you’re buying companies with durable competitive advantages — what Buffett calls “economic moats.”

Expect: 20–60 results. More generous than Graham because the valuation threshold is higher, but the quality bar is also higher.

Best for: Investors who want both value and quality — willing to pay slightly more for better businesses.

→ Try the Quality Value screen on ScreenerHub

Screen 3: Deep Value (Contrarian)

For investors willing to fish in the most unloved waters. Deep value targets stocks that are extremely cheap — often because the market hates them. The risk is higher, but so is the potential reward if the market re-rates them.

Philosophy: The market overreacts. When a stock is priced at less than 8x earnings and trades below book value while still generating free cash flow, the downside is often already priced in.

Expect: 5–20 results. These stocks are cheap for a reason — your job is to figure out whether the reason is temporary (opportunity) or permanent (trap).

Best for: Experienced investors comfortable with contrarian positions, shorter holding periods, and higher volatility.

→ Try the Deep Value screen on ScreenerHub

Step-by-Step: Building a Value Screen on ScreenerHub

Here’s the exact workflow to go from zero to a working value stock screen:

Step 1: Open the Screener Studio

Navigate to the Screener Studio. This is the workspace where you build, run, and save screens. No sign-up required to browse results.

Step 2: Add valuation filters first

Click to add a filter. Under the Valuation category, add:

• P/E Ratio — set to less than 15
• Price/FCF — set to less than 12

These two filters together eliminate expensive stocks from both an earnings and a cash flow perspective. You’ll immediately see the results narrow from 26,000+ to a few hundred.

Step 3: Layer in quality filters

Under Profitability & Returns, add:

• ROE — set to greater than 10%

This single filter cuts your shortlist roughly in half, removing unprofitable businesses that are cheap for the wrong reasons.

Step 4: Add a financial health check

Under Balance Sheet Quality, add:

• Debt-to-Equity — set to less than 0.5

Now you’re looking at cheap, profitable companies with conservative debt levels. The results should be in the range of 20–80 stocks, depending on current market conditions.

Step 5: Set a minimum size

Under Company Size, add:

• Market Capitalization — set to greater than $1B

This keeps your screen in investable territory and filters out micro-caps where data quality may be inconsistent.

Step 6: Sort and analyze

Your results table now shows every stock that passes all five filters. Sort by the column that matters most to you:

• Sort by P/E to find the cheapest stocks by earnings
• Sort by ROE to find the most profitable bargains
• Sort by Market Cap to see the largest (most stable) names first

Step 7: Save your screen and build a watchlist

Found promising candidates? Save your screen for later and add your top picks to a watchlist for tracking. Your saved screener preserves all criteria so you can re-run it next month with fresh data.

Value Screening by Sector: Benchmarks That Actually Matter

A P/E ratio of 15 means something very different for a utility company than for a tech company. Sector context matters.

How to use this table: If you’re screening across all sectors, use broad thresholds (P/E < 15, ROE > 10%). If you’re screening within a single sector, tighten your thresholds relative to the sector norms above.

On ScreenerHub, you can add Sector or Industry as a filter to focus your screen on one sector at a time — then adjust your valuation thresholds to that sector’s typical range.

The Value Trap Problem — and How to Avoid It

The biggest risk in value investing isn’t overpaying. It’s buying a stock that looks cheap but is actually in permanent decline. This is called a value trap.

How value traps happen

A stock might have a P/E of 6 and a P/B of 0.8 — textbook value territory. But if earnings are declining 20% per year, that “cheap” P/E will rise to 12 next year even without a price change. The low multiple was a snapshot, not a signal.

5 warning signs of a value trap

The fix is simple: never screen on valuation alone. Always combine cheap valuation with at least one quality filter (ROE, margins) and one financial health filter (debt, cash flow). The three proven screens above all follow this principle.

Pro tip: Use ScreenerHub’s Monitoring Lab to track your value picks over time. If a stock’s ROE drops below your threshold or its debt-to-equity rises, the system flags it — so you can exit before a value pick becomes a value trap.

Graham’s Value Investing Formula — The Math Behind the Screen

Benjamin Graham proposed a simple formula for estimating a stock’s intrinsic value:

Example

A company earns $4 per share with an expected growth rate of 7%:

Graham recommended buying only when the margin of safety is at least 25%. This formula isn’t a substitute for a stock screener — but it explains the logic behind why a low P/E combined with moderate growth is exactly what value screens are looking for.

Common Value Screening Mistakes

Mistake 1: Screening only on P/E

The P/E ratio is the most popular filter on any screener — and the most misused. Companies can have artificially low P/E ratios due to one-time earnings events, accounting adjustments, or cyclical peaks.

Fix: Always pair P/E with at least one other valuation metric (P/B, EV/EBITDA, or Price/FCF) and a quality metric (ROE or net margin).

Mistake 2: Ignoring sector context

A P/E of 12 is expensive for a utility stock but cheap for a software company. Applying the same absolute thresholds across all sectors leads to a portfolio loaded with low-growth industries and missing opportunities in higher-growth sectors.

Fix: Either use sector-relative thresholds (screen within one sector at a time) or combine P/E with growth metrics to capture stocks that are cheap relative to their growth rate.

Mistake 3: Setting too many filters

Adding 10+ criteria feels thorough, but it often eliminates every viable candidate. Value screens work best with 4–6 well-chosen filters.

Fix: Start with the Graham Classic (5 filters). Only add more criteria if your results are too broad. On ScreenerHub, results update in real time — you can see instantly how each filter narrows your list.

Mistake 4: Screening once and never revisiting

Markets change. A stock that was undervalued three months ago might now be fairly valued — or overvalued. Running a screen once gives you a snapshot, not a process.

Fix: Re-run your saved screens monthly. Better yet, use the Monitoring Lab to automatically check whether your watchlist stocks still pass your value criteria. When a stock “drifts” out of your screen’s thresholds, you’ll get an alert.

Mistake 5: Buying everything that passes the screen

A screener output is a research shortlist, not a buy list. Every stock that passes deserves deeper analysis: read the annual report, understand the competitive landscape, check management quality, and verify that the numbers make sense.

Fix: Treat screening as step 1. Follow it with fundamental analysis of your top 5–10 candidates before making any investment decision.

How to Monitor Your Value Picks After Screening

Finding value stocks is half the job. The other half is monitoring whether they stay valuable. Markets move. Earnings change. A stock that met your criteria in January might fail them by June.

This is where most value investors fall short — and where ScreenerHub’s Monitoring Lab closes the gap.

The monitoring workflow

1. Build your value screen in the Screener Studio
2. Save your top picks to a watchlist
3. Create a monitoring set that pairs your watchlist with your value screener
4. Schedule automated runs — daily, weekly, or monthly
5. Review deltas — the Monitoring Lab shows which stocks still pass every criterion and which have drifted

What “criteria drift” looks like

When Stock B’s ROE drops below your 10% threshold, the Monitoring Lab flags it. You then decide: is this a temporary dip (hold), or has the investment thesis changed (sell)?

Without monitoring, you wouldn’t notice until the next time you manually check — which could be months later.

→ Learn more about the Monitoring Lab

Frequently Asked Questions

How many value stocks should I expect from a screen?

It depends on market conditions and how strict your criteria are. In expensive markets (high overall P/E), a strict Graham-style screen might return only 5–15 stocks. In cheaper markets or during corrections, the same screen could return 50+. If you get zero results, relax your thresholds slightly — or focus on a single sector.

Is value investing still relevant in 2026?

Yes. Value investing has underperformed growth in some periods (2010–2020), but outperformed in others (2000–2008, 2021–2023). The core principle — buying assets for less than they’re worth — is timeless. What changes is which sectors and stocks qualify as undervalued.

Should I screen for value stocks internationally?

Absolutely. International markets — especially European, Japanese, and emerging markets — often have higher concentrations of value stocks than the U.S. market. On ScreenerHub, you can filter by Country to screen across 26,000+ stocks globally.

What’s the difference between value investing and growth investing?

Value investing seeks stocks trading below intrinsic value (cheap price, proven earnings). Growth investing seeks stocks with above-average revenue and earnings growth (higher price, future potential). Both approaches work — and some investors combine them by screening for growth-at-a-reasonable-price (GARP), which adds growth filters to a value screen.

How do I know if a value stock is a value trap?

No screen catches every trap, but combining valuation filters with quality metrics (ROE > 10%, positive revenue growth, low debt) eliminates most traps. See the value trap section above for specific filters to add.

Can I use ScreenerHub for free?

Yes. The stock browser and basic screening are free. You get 1 saved screener and 1 watchlist (20 stocks). The Pro plan unlocks all 50+ filter criteria, unlimited screeners and watchlists, the Monitoring Lab with automated runs, email alerts, and CSV export.

Your Value Screening Checklist

Before running any value stock screen, run through this checklist:

• ✅ At least 2 valuation filters — don’t rely on P/E alone
• ✅ At least 1 quality filter — ROE, net margin, or gross margin
• ✅ At least 1 financial health filter — debt-to-equity or current ratio
• ✅ Minimum market cap — avoid illiquid micro-caps
• ✅ Sector context — consider industry norms for your thresholds
• ✅ Monitor after buying — set up the Monitoring Lab to track drift
• ✅ Research before buying — screening gives you candidates, not buy signals

Start Screening for Value Stocks

You’ve seen the criteria. You’ve seen the screens. Now build your own.

Try a proven starting point — Open ScreenerHub’s Screener Studio and recreate the Graham Classic screen in under two minutes:

1. P/E ratio < 15
2. P/B ratio < 1.5
3. Current ratio > 1.5
4. Debt-to-equity < 0.5
5. Market cap > $1B

See what passes. Sort the results. Save the stocks worth researching to a watchlist. Then set up monitoring so you know the moment any of your picks stops qualifying.

Value investing isn’t about finding a single great stock. It’s about building a repeatable, data-driven process. The screener handles the filtering. You handle the judgment.

Further Reading

• What Is Stock Screening? The Complete Guide — Understand the fundamentals of systematic screening
• What Is the P/E Ratio? How to Use It — Deep dive into the most important valuation filter
• Stock Screener Features — Explore all 50+ filter criteria
• Watchlists — How to track your value stock candidates
• Monitoring Lab — Automated criteria drift detection
• Pre-Built Screens — Browse ready-made screens for value, dividend, growth, and more
• ScreenerHub Pricing — Free vs. Pro plan comparison