How to find which securities to evaluate under a top-down approach

If you start with the top-down approach you can find desirable industries/sectors. But what is next-- how do you maximize efficiency to conduct in-depth fundamental analysis only on securities who have a greater statistical likelihood of being good investments? The following are filtration tools that can be applied:

• Valuation and Fundamental Stock Screens: Multiple tools provide scale and can eliminate less desirable securities. An example is the PEG ratio. If you applied a PEG ratio to the companies within a particular sector you could eliminate large percentages of prospective securities based on their PEG ratio multiple and how that ratio compares to the industry mean. Other examples: P/B ratios, P/S ratios, P/CF, EV/EBITDA, etc.
  
• Insider Analysis: When a company insider buys or sells their company stocks they have to disclose their transactions to the SEC. If an insider is buying their own stock for their personal holdings-- it certainly makes sense that further evaluation of their company may be in order. I believe that insider analysis has merit particularly when considering long positions.

In theory you could apply all of these filters to a particular sector and arrive at a cross-section of possible companies that are most likely to be undervalued. This does not imply that such a cross-section are undervalued, but it certainly assists to come-up with a much more workable list of companies to evaluate.