The function EQS (Equity Screening) allows us to filter companies based on a set of custom criteria.
The function can also be reached by <Equity> <GO> from the command line or from the main Bloomberg menu by going to its home and then selecting Equities -> Idea Generation -> Equity Screening.
The results of the screening can then be used with the EQBT (Equity Backtesting) function.
From the Screening Criteria section we can modify the "universe" of securities on which the screening process is performed. We can for example narrow it down to individual sectors, regions, types and more.
Let us set the universe to only the securities in the S&P 500 index. Click on Indices under Screening Criteria.
Now find the S&P 500 index by typing its name in the amber box and then finding it from the drop-down recommendations. We could also list additional indices if we wanted. When happy with the selection, click on Update.
Instead of including the index we could also exclude it from the universe. When selecting the S&P 500 index (or any other criteria) we change the Included setting to Excluded before selecting Update.
Let us now apply a few filters. Adding a filter can be done from the Add Criteria section by:
Let us apply one using the Fields button first. Upon pressing a new window opens. Find and select EBITDA and click on Update.
This closes the window, while a few new fields appear in the Add Criteria section. Click on the field to set a filtering condition. We want the EBITDA to be higher than some value, that is why we change No condition, display only to Greater than.
Another field opens below which allows us to input the value. The letter "M" on its left side denotes that the number input is scaled in millions. We type "1000", which means that only the companies with EBITDA of over a billion USD will be kept in the list. We also change the time of EBITDA data used to the Latest Filing. Press <GO> (Enter).
Especially when dealing with securities from countries using different currencies, it is also beneficial to set the Criteria Currency to a uniform one, for example USD. To change this for the EBITDA condition, click on it in the Selected Screening Criteria section and its settings will open again, where we can switch to USD. Press <GO> when done and the list will get updated.
From the Matches column of the Selected Screening Criteria table we can see that currently 173 out of 503 S&P 500 constituents satisfy the applied condition.
Now we want to find just the smallest 20 companies from the 173. This time we will find the filter directly from the amber box: type "market cap" in the amber box and select the recommended option. Again change No condition, display only option, this time to Rank.
In order to pull the 20 bottom companies by size, choose Lower Value is Better instead, then Top for the criterion, and add "20" to the adjacent box. This way we ordered the database to "order" the remaining companies from the smallest to the largest and then select the first 20.
To save the selected screening criteria for future use, choose Actions -> Save As... and a new window will open, in which we input the desired name and then click Update.
To open a previously saved screening, select All Saved Screens.
Then, select the desired screening from the list by clicking on it. A window will open: select View/Edit Screen Criteria to get back to the screen we have already seen above (where we can edit the applied filters), or Run Screen to get directly to the table of results (this is covered below).
When we are satisfied with the selection of filters, we click on See Results in the bottom right corner.
A table with companies that satisfy the conditions is presented. Besides the data we used for filtering, there are also some additional columns included (Price 1 Day ago, P/E ratio).
The rows in the table can be sorted by clicking on an individual column title. The arrow and its direction next to a column title tell us that the companies are currently sorted by EBITDA in descending order. The abbreviation "LF" next to EBITDA means "last filing", which is the setting we used in our filter for EBITDA.
There are also numerous tabs available with other financial metrics to compare the filtered companies.
To add a column to the table without performing any filtering, use the Add Column field and select the period of data. Then hit <GO> and the column will be included.
To export the results to Excel or elsewhere use the red Export button and choose the desired option.
