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Stock screening mechanics: filters, statements and published scores

Screening is two separate skills that get treated as one. Choosing criteria is the easy half. Knowing what your criteria quietly excluded, and whether the underlying figures mean what the field name says, is the half that decides whether the shortlist is worth anything.

A stack of perforated fanfold ledger paper cascading over the edge of a dark desk, the perforation strips catching the light
A screen is only as good as the universe it was pointed at and the fields it trusted. Both are choices, and both are usually invisible.
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Eight pages, filter to formula

The order these pages assume

A brass card-index tray with tabbed dividers standing on dark board, three tabs raised above the rest, every card blank
A screen produces a shortlist, not an answer. These are the tabs worth pulling out by hand afterwards.

Screening reads best from the outside in. Start with the mechanism, what a screener does to a universe when you add a criterion, then move to the statements the criteria are drawn from, then to the composite scores that bundle several ratios into one number, and only then to charts, which describe price rather than the business. Coming the other way round, from a chart to a screen, is how people end up filtering on fields they have never read the definition of.

Every field name hides a decision

A screener column labeled "P/E" has already resolved at least four questions for you: which earnings figure, over which twelve months, adjusted or as-reported, and what to do when the number is negative. Two vendors resolve those differently and both label the column identically. This is not an accusation of bad faith; it is a data-modeling reality, and it is why the pages here spend as much time on definitions as on formulas. When a screen surprises you, the definition is the first place to look, well before the conclusion.

Composite scores, and what they are for

The Piotroski F-Score and the Altman Z-Score are in this section for the same reason: both are published, both are computable from ordinary filings, and both were designed to answer a narrow question. The F-Score asks whether a company's fundamentals improved across nine specific tests. The Z-Score estimates distance from financial distress using five weighted ratios. Neither was designed to pick winners, and using them that way is a category error that the original papers themselves are careful about. Both are computable by hand, and both have a worksheet here that shows every term as it is entered: the F-Score worksheet and the Z-Score calculator.

Where small caps break the tooling

The small-cap page exists because screens behave differently at that end of the market, and the reasons are mechanical rather than philosophical. Data fields go missing more often. Free float can be a small fraction of market capitalization, so a screen ranking by capitalization is not ranking by what is actually tradable. Thin volume means a criterion that reads as a bargain may simply be a price nobody has transacted at recently. None of that makes small caps uninvestigable; it makes the screen's output need more checking, and it is better to know which checks before running it.

FAQ

How to read this section

Is a screen a shortlist or a conclusion?

A shortlist, and a fragile one. A screen answers exactly the question its criteria encode over exactly the universe it was pointed at. Change the universe from "all US listings" to "NYSE and Nasdaq primary listings" and the same criteria return a different set. Every page in this section treats a screen as a starting point that has to be checked by hand.

Why does this section include scores like the F-Score and Z-Score?

Because they are transparent. Both are published formulas over reported figures, which means you can compute them yourself and see exactly which input moved the result. That is the opposite of a proprietary rating, and it is the only kind of score worth explaining: the value is in the arithmetic being inspectable, not in the number being right.

Do these pages tell me which companies pass?

No. Worked examples use constructed figures chosen to make the arithmetic legible, and no page names a company as a pass or a fail. The purpose is that you can run the same calculation over any filing you like and know what each term is doing.

Where does the bond page fit into a screening section?

Bond arithmetic sets the discount rate against which every equity screen is implicitly judged, and price-yield-duration is a mechanical relationship rather than a market opinion. It sits here because it is the same kind of content: a published relationship you can compute, not a forecast about where rates go next.