What is a screening?

Screening is known to be the process of filtering a set of potential investments into a smaller set that exhibits certain desirable characteristics by applying a set of criteria. These criteria include financial ratios e.g. growth investors may focus on earnings growth, Value investors may focus on the low share price in relation to earnings or assets, market-oriented may be neither value or growth focused and other characteristics such as market capitalization and membership of popular indices.

There are two different types of analysis which are known to be; the top down analysis involves identifying attractive geographical and industry segments and then choosing the most attractive investments from them. The bottom-up analysis involves selecting specific investments within a specific investment universe.