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Colfax Corp (NYSE:CFX)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Colfax Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

CFX' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 8

4
8

During the past 10 years, the highest Piotroski F-Score of Colfax Corp was 8. The lowest was 4. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 46.79 + 37.126 + 55.475 + 58.392 = $198 Mil.
Cash Flow from Operations was -67.035 + 175.324 + 101.163 + 99.096 = $309 Mil.
Revenue was 1054.331 + 1171.378 + 1014.57 + 1074.118 = $4,314 Mil.
Gross Profit was 325.632 + 357.381 + 320.294 + 337.822 = $1,341 Mil.
Total Assets at the begining of this year (Mar13) was $5,846 Mil.
Total Assets was $6,771 Mil.
Long-Term Debt was $1,108 Mil.
Total Current Assets was $2,342 Mil.
Total Current Liabilities was $1,313 Mil.
Net Income was 27.635 + 19.736 + 9.094 + 12.366 = $69 Mil.

Revenue was 947.143 + 1027.397 + 954.44 + 1045.653 = $3,975 Mil.
Gross Profit was 290.725 + 307.57 + 287.987 + 314.862 = $1,201 Mil.
Total Assets at the begining of last year (Mar12) was $6,130 Mil.
Total Assets was $5,846 Mil.
Long-Term Debt was $1,446 Mil.
Total Current Assets was $1,987 Mil.
Total Current Liabilities was $1,267 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Colfax Corp's current net income was 198. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Colfax Corp's current cash flow from operations was 309. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Mar13)
=197.783/5846.321
=0.03383034

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=68.831/6130.081
=0.0112284

Colfax Corp's return on assets of this year was 0.03383034. Colfax Corp's return on assets of last year was 0.0112284. ==> This year is higher. ==> Score 1.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Colfax Corp's current net income was 198. Colfax Corp's current cash flow from operations was 309. ==> 309 > 198 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=1107.532/6771.224
=0.16356452

Gearing (Last Year)=Long-Term Debt/Total Assets
=1445.657/5846.321
=0.24727636

Colfax Corp's gearing of this year was 0.16356452. Colfax Corp's gearing of last year was 0.24727636. ==> This year is lower. ==> Score 1.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year)=Total Current Assets/Total Current Liabilities
=2342.041/1313.24
=1.78340669

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1986.542/1267.451
=1.56735211

Colfax Corp's current ratio of this year was 1.78340669. Colfax Corp's current ratio of last year was 1.56735211. ==> This year's current ratio is higher. ==> Score 1.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Colfax Corp's number of shares in issue this year was 114.1. Colfax Corp's number of shares in issue last year was 95.2. ==> There is more number of shares in issue this year. ==> Score 0.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year)=Gross Profit/Revenue
=1341.129/4314.397
=0.3108497

Gross Margin (Last Year)=Gross Profit/Revenue
=1201.144/3974.633
=0.30220249

Colfax Corp's gross margin of this year was 0.3108497. Colfax Corp's gross margin of last year was 0.30220249. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue/Total Assets at the beginning of this year (Mar13)
=4314.397/5846.321
=0.73796786

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=3974.633/6130.081
=0.64838181

Colfax Corp's asset turnover of this year was 0.73796786. Colfax Corp's asset turnover of last year was 0.64838181. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+0+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Colfax Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Colfax Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 011101
Q2 011111
Q3 010001
Q4 011111
Q5 111001
Q6 010010
Q7 000000
Q8 100001
Q9 100110
F-score 364446

Colfax Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1000011111
Q2 1001111111
Q3 0000011111
Q4 1111111111
Q5 0111011111
Q6 0111100001
Q7 0000000000
Q8 0000011111
Q9 1111100001
F-score 4445466668
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