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

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Colfax Corp has an F-score of 7. 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: 7
Current: 7

4
7

During the past 11 years, the highest Piotroski F-Score of Colfax Corp was 7. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 46.79 + 191.785 + 73.389 + 80.134 = $392 Mil.
Cash Flow from Operations was -67.035 + 106.493 + 162.064 + 184.236 = $386 Mil.
Revenue was 1054.331 + 1199.336 + 1164.453 + 1206.356 = $4,624 Mil.
Gross Profit was 325.632 + 388.171 + 373.195 + 391.847 = $1,479 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(6601.184 + 6771.224 + 7927.833 + 7529.315 + 7245.098) / 5 = $7214.9308 Mil.
Total Assets at the begining of this year (Dec13) was $6,601 Mil.
Long-Term Debt was $1,529 Mil.
Total Current Assets was $2,099 Mil.
Total Current Liabilities was $1,286 Mil.
Net Income was 27.635 + 58.392 + 55.475 + 37.126 = $179 Mil.

Revenue was 947.143 + 1074.118 + 1014.57 + 1171.378 = $4,207 Mil.
Gross Profit was 290.725 + 337.822 + 320.294 + 357.381 = $1,306 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(6148.287 + 5846.321 + 6094.4 + 6333.888 + 6601.184) / 5 = $6204.816 Mil.
Total Assets at the begining of last year (Dec12) was $6,148 Mil.
Long-Term Debt was $1,458 Mil.
Total Current Assets was $2,132 Mil.
Total Current Liabilities was $1,384 Mil.

Profitability

Question 1. 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 (TTM) was 392. ==> Positive ==> Score 1.

Question 2. 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 (TTM) was 386. ==> Positive ==> Score 1.

Question 3. 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 (TTM)/Total Assets at the Beginning of This Year (Dec13)
=392.098/6601.184
=0.05939813

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=178.628/6148.287
=0.0290533

Colfax Corp's return on assets of this year was 0.05939813. Colfax Corp's return on assets of last year was 0.0290533. ==> This year is higher. ==> Score 1.

Question 4. 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 (TTM) was 392. Colfax Corp's current cash flow from operations (TTM) was 386. ==> 386 <= 392 ==> CFROA <= ROA ==> Score 0.

Funding

Question 5. Change in Gearing or Leverage

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

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=1529.389/7214.9308
=0.21197556

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=1457.642/6204.816
=0.23492107

Colfax Corp's gearing of this year was 0.21197556. Colfax Corp's gearing of last year was 0.23492107. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. 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: Dec14)=Total Current Assets/Total Current Liabilities
=2099.463/1285.535
=1.6331434

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=2132.158/1384.268
=1.54027833

Colfax Corp's current ratio of this year was 1.6331434. Colfax Corp's current ratio of last year was 1.54027833. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

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

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

Colfax Corp's number of shares in issue this year was 125.4. Colfax Corp's number of shares in issue last year was 103.6. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. 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: TTM)=Gross Profit/Revenue
=1478.845/4624.476
=0.3197865

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1306.222/4207.209
=0.31047233

Colfax Corp's gross margin of this year was 0.3197865. Colfax Corp's gross margin of last year was 0.31047233. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year 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 (TTM)/Total Assets at the Beginning of This Year (Dec13)
=4624.476/6601.184
=0.70055251

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=4207.209/6148.287
=0.68428962

Colfax Corp's asset turnover of this year was 0.70055251. Colfax Corp's asset turnover of last year was 0.68428962. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+0+1+1+0+1+1
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Colfax Corp has an F-score of 7. 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 0111011
Question 2 0111111
Question 3 0100011
Question 4 0111110
Question 5 1110011
Question 6 0100101
Question 7 0000000
Question 8 1000011
Question 9 1001101
F-score 3644467

Colfax Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 0011111111
Question 2 1111111111
Question 3 0011111111
Question 4 1111111010
Question 5 1011111001
Question 6 1100001001
Question 7 0000000000
Question 8 0011111111
Question 9 1100001111
F-score 5466668567
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