How to Find Undervalued Stocks Fast in 2025

You know investing is hard. Too much noise, too many choices. This article shows you how to cut through it all,fast. You will learn why a smart stock screener is your best friend in 2025: how it helps you find undervalued stocks, avoid costly mistakes, and lets you follow a proven system. 

You will discover the best strategies (like Magic Formula and Shareholder Yield), the key ratios that matter, and how to backtest before risking your money. Whether you want control or simplicity, this guide helps you invest smarter — with clarity and confidence.

Estimated Reading Time: 7 minutes

Why Stock Screening Is Essential in 2025

If you are investing your own money, you already know one thing: the stock market does not make it easy. Every day, headlines and opinions try to pull your focus in ten different directions.

The problem is not a lack of data. The problem is that there is too much of it.

Most of it is noisy, shallow, and often wrong. That is why finding undervalued stocks in 2025 starts with one simple idea: you need an investment system.

A good stock screener is like a compass. It helps you cut through the fog and stay focused. You do not have time to dig through 22,000 stocks. You need tools that show you what matters, fast. 

Stock screeners give you that power, but only if they are built right. In this article, I will show you how to choose a screener that fits your style, saves your time, and helps you find undervalued stocks with real potential.

What Makes a Smart Investment Strategy in 2025

A. Use Proven, Data-Driven Rules

The best investment strategies for 2025 are not guesses. They are not based on emotions or gut feelings. They are based on numbers—solid, tested numbers.

For example, when you use a strategy like “Value + Quality + Momentum,” you are following a recipe that has worked for decades. These strategies help you avoid common mistakes, like buying cheap stocks that are cheap for a reason.

A good example is the Quant Value Strategy, which has beaten the market using a mix of low price, high quality, and rising momentum​. This kind of approach helps you stay calm when others panic and gives you the confidence to invest with a clear plan.

Add a stop-loss rule, and you also limit your downside. You are not just hoping a stock will go up. You are following a system that works to limited your losses.

B. Screen Using the Right Metrics

You have probably seen and used P/E ratios. But in 2025, smarter investors go deeper.

Here are some advanced ratios to help you find stocks that are not just cheap — but undervalued for the right reasons:

• Earnings Yield (EBIT/EV) → Shows how much pre-tax profit a company makes for every dollar it has invested.

• Free Cash Flow Yield → Focuses on real money, not just accounting earnings.

• PEG Ratio → Helps you compare price to earnings and growth.

Quality matters too. Use metrics like:

• Piotroski F-Score → Checks how strong a company’s financial health is.

• Altman Z-Score → Warns you if a company might go bankrupt.

Using all these ratios and indicators is not complicated once you know what to look for. They are like filters. Each one helps you remove weak companies and focus on winners.

C. Pick from Pre-Tested Investment Strategies

You do not need to invent your own strategy. Many smart investors use predefined ones that have been tested over time. Here are some that work:

• Magic Formula: Focuses on high return on capital and low price.

• ERP5: Ranks companies by value, return on capital, and quality.

• Shareholder Yield: Combines dividends + buybacks for strong returns.

These are not just ideas. They have decades of backtesting behind them​. They have worked in many markets and in many different years. Even better, the Quant Investing screener includes all these as ready-to-use screens. You can apply them with a few mouse clicks.

This article shows you how easy you can do this: Load Predefined Stock Screens Fast

Click here to start finding ideas that EXACTLY meet your investment strategy.

D. Backtest Before You Commit

Backtesting is how you know a strategy works. You check if your screen would have worked in the past. That way, you are not flying blind.

The Quant Investing screener gives you access to what all the ratios and indicators were in the past, also called point-in-time data. This means it uses the data that was available at the time—not calculated numbers that cheat the results.

When you backtest a screen, you see not just what stocks it picked, but how well it performed. That gives you confidence. You are not just reacting to the market. You are planning and investing systematically.

E. Choose a Tool That Is Easy to Use

You should not need a finance degree to find good stocks. A good screener makes it simple.

The Quant Investing screener uses slider-based filters. You can pick four criteria at once, adjust the range, and get your stock list in seconds. You can also save your screens, backtest them, and even get alerts.

And it works globally—with over 22,000 companies from North America, Europe, and Asia​.

No fluff. Just what you need, fast.

"Cuts my research from days to seconds." — Enrique, Spain

Why the Quant Investing Screener Stands Out

The Quant Investing screener is not like the others. It was built by a real investor. Our founder —Tim du Toit— could not find a tool that met his needs, so he made his own​.

It is used by serious private investors who manage over $1M portfolios​. It does not just promise results. It delivers.

Here is what you get:

• 110+ metrics to screen for value, quality, momentum, and income.

• Backtests with real, historical data.

• Over 22 predefined, proven strategies to save you time.

• Simple interface with serious depth.

It is a professional tool, but made for everyday investors like you. You do not need to learn coding or download spreadsheets. You just log in, screen, and start investing smarter.

Match the Tool to Your Style

Here is how different investors use the screener:

Whatever your investment style, you will find a fit. And if you ever want to switch from “do-it-yourself” to “done-for-you,” the newsletter strategies work seamlessly with the screener.

Final Thoughts: Start Smarter in 2025

Most investors guess. They follow news tips, buy what is popular, and panic when the market falls.

You can be different.

When you use a smart screener, you remove emotion. You follow a plan. You find undervalued stocks based on facts.

The Quant Investing screener is not just a tool. It is a philosophy. Built by investors. Backed by decades of data. Trusted by people who take investing seriously. It saves you time, protects your money, and gives you confidence.

👉 Take the first step: Try the screener free for 30 days. Test a strategy. Run a backtest. You will see the difference in minutes.

Click here to start finding ideas that EXACTLY meet your investment strategy.

FREQUENTLY ASKED QUESTIONS

1️. How do I know if a stock is truly undervalued or just cheap for a bad reason?

It is a smart question because not every low-priced stock is a bargain. To tell the difference:

• Look beyond the P/E ratio.

• Use Earnings Yield (EBIT/EV) to check if the company is really earning well.

• Check the Piotroski F-Score and Altman Z-Score to make sure the company is healthy and not near bankruptcy.
  
  

This way, you skip the junk and focus on solid, undervalued companies.

2️. What is the easiest way to get started with a stock screener if I have never used one?

Do not overthink it! Start simple:

• Choose a predefined strategy like the Magic Formula or Shareholder Yield. These have been tested for decades.

• Use the slider tool to adjust 2 or 3 key metrics — like Earnings Yield, Dividend Yield, or Momentum.

• Save your screen and run a backtest to check how it would have done in the past.

You will build confidence fast by starting small and learning as you go.

3️. How can I protect myself from big losses if my stock picks go wrong?

Losses happen, but smart investors limit the damage. Here is how:

• Set a trailing stop-loss rule (like 20%). This means you sell if a stock falls 20% from the highest price since you bought it. 

• Only buy new stocks when the market is rising (use the 200-day moving average rule).

• Diversify across at least 10–15 stocks to spread risk.

These steps protect you from big hits and keep your money safer.

4️. What is backtesting, and why should I bother with it?

Think of backtesting like a "time machine." It lets you test your strategy on past data to see if it worked before.

• If your screen finds good stocks that also did well historically, it gives you proof that your system has real power.

• The Quant Investing screener uses point-in-time data, so results are honest (no cheating).

Backtesting helps you avoid blind guessing and gives you confidence in your plan.

5️. What metrics matter most if I want reliable income from my stocks?

If you love income (dividends and buybacks), focus on:

• Shareholder Yield: Adds dividends + buybacks = total cash returned to you.

• Free Cash Flow Yield: Shows how much real money the company is making.

• Pick large-cap stocks with a strong history of paying and growing dividends.

This keeps your income safer and steadier.

6️. Can I really beat the market as a private investor, or is that just hype?

Yes, you can—but only if you follow a proven system. The truth is:

• Many investors fail because they chase news or act on emotion.

• A quantitative strategy (like Value + Quality + Momentum) has beaten the market in decades of testing.

• Tools like the Quant Investing screener are built by investors for investors, so you are not alone.

With discipline and data, you can absolutely outperform.

7️.  What should I do if I feel overwhelmed by all the stock data out there?

You are not alone — information overload is a big problem. To keep it simple:

• Focus on just a few key ratios (Earnings Yield, Piotroski F-Score, PEG Ratio).

• Use the screener’s predefined filters to skip the noise.

• Trust your system, not the headlines.
  
  

Remember: a good screener cuts through the noise and saves you time. As one user said, “It cuts my research from days to seconds.”

Click here to start finding ideas that EXACTLY meet your investment strategy.