Screening

Filtering a universe down to a manageable candidate list using quantitative criteria.

If your screen takes 4,500 listed companies down to 45, it has done its job, which is to allocate attention. Selecting investments is a separate job.

Good screens are simple and slow-moving. Return on capital above a threshold, leverage below one, positive operating cash flow in each of five years, and a market capitalisation above a liquidity floor will produce a list worth reading.

Screens on Indian data need care. Reported figures differ between providers. Standalone and consolidated numbers are mixed up routinely, and one-off items distort every ratio built on a single year.

Screen on five-year averages, then verify from the filings.