There is also a video archive of all the past topics you can choose from. These include:
- 5 Common Pitfalls to Avoid in Screening
- Assessing Counterparty Credit Risk
- Corporate Valuations Series
- New Portfolio Templates
- Value Investing Using S&P Capital IQ
- Excel Trilogy: Basic/Intermediate/Advanced
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The most recent webinar was titled “5 Common Pitfalls to Avoid in Screening” and we shall look at the first example from it.
Linking criteria and identifying a company as public on a given date in history
In this example we want to screen for a list of public materials companies that closed an M&A deal in the last 12 months with total revenue greater than US$1,000,000,000 one day prior to the closure of the deal.
- Begin by choosing the Screening tab in the menu bar and clicking on Companies.
- The first criteria must return no more than 1,000,000 results. From the first column, choose Company Details > Industry Classifications and click on Materials, then Add Criteria.
- From the last column, choose M&A Details > Dates then in the list choose Closed Date, with the Time Frame: Last 12 Months. This metric refers to a transaction, not to a company, but we can still use it for screening. Click Add Criteria.
- We now want to identify the company as a public company. It might be tempting to go for Company Details > Company Type: Public Company, but that would apply to the status today, not on the date of the transaction. To get the status on the date of the transaction, you need a metric relating to the Transaction (about the target company).So again from the last column, choose M&A Details > Valuations and in the list choose Pre-Deal Share Performance with the Data Point: Target Market Cap 1-Day Prior and the Value: Greater Than 0. This means the company was publicly listed. Ensure that Target/Issuer is displayed in the box below, and choose Type: AND from the radio buttons at the bottom. Click Add Criteria.Why Type: AND instead of Type: New (the default)? Because this criteria is part of a Transaction detail, and we are in Company Screening, we need to combine all the Transactions criteria together, using logical AND. It is a bit confusing, as all the criteria are combined with AND rather than OR, but it is essential when linking these types of screenings.
- Finally, to limit to target companies with Total Revenue greater than $1 billion at the time of the deal and not at the present day, choose from the last column M&A Details > Valuations then from the list Target/Issuer LTM Financials (at Announcement) with the Data Point: Total Revenue, Value: Greater Than 1000 (the units are millions of US Dollars). Again, ensure Target/Issuer is displayed below this and choose Type: AND to link it to the Transaction criteria. Click Add Criteria, then View Results.
The most important thing to take away from this is to consider using Pre-Deal Share Performance with the Data Point: Target Market Cap 1-Day Prior and the Value: Greater Than 0 to identify a company as public from a transaction, using the Type: AND operator after choosing a deal date.
Like the screening tools in other databases, it starts of with all securities it has (Security Universe, today 654012 matches), then begins to refine the screening with the currently active primary quotes (Actively Traded Primary Security of Company, today 67292 matches). You can add further criteria in the amber box across the middle of the screen; simply type and select the auto-complete entry. In this example, I typed “United Kingdom” to select Country of Domicile (1808 matches), then “Technology” to select the Sector (141 matches).
If you want to use this list elsewhere (for example in Datastream), it would be wise to add an extra column, ISIN, to use as a company identifier. (Click in the amber bar across the top of the screen labelled Add Column, type ISIN Number, select the first match and press Enter.)
Finally, to export the table to Excel, click on the red menu bar option Output > Excel > All Securities, which will automatically open in Excel after you accept any warning messages about file formats.