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Colony Capital Inc (NYSE:CLNY)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Colony Capital Inc has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

CLNY' s 10-Year Piotroski F-Score Range
Min: 3   Max: 6
Current: 3

3
6

During the past 6 years, the highest Piotroski F-Score of Colony Capital Inc was 6. The lowest was 3. And the median was 4.


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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 37.649 + 38.954 + 24.816 + 10.529 = $111.9 Mil.
Cash Flow from Operations was 36.03 + 30.255 + 33.158 + 57.921 = $157.4 Mil.
Revenue was 65.973 + 77.282 + 85.597 + 116.612 = $345.5 Mil.
Gross Profit was 65.973 + 77.282 + 85.597 + 116.612 = $345.5 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(3165.264 + 3751.696 + 3953.65 + 5871.848 + 6163.893) / 5 = $4581.2702 Mil.
Total Assets at the begining of this year (Mar14) was $3,165.3 Mil.
Long-Term Debt was $2,657.9 Mil.
Total Current Assets was $2,211.2 Mil.
Total Current Liabilities was $617.8 Mil.
Net Income was 25.651 + 26.449 + 30.258 + 21.73 = $104.1 Mil.

Revenue was 40.764 + 47.47 + 58.42 + 59.207 = $205.9 Mil.
Gross Profit was 40.764 + 47.47 + 58.42 + 59.207 = $205.9 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(1669.186 + 2115.101 + 2098.831 + 2628.552 + 3165.264) / 5 = $2335.3868 Mil.
Total Assets at the begining of last year (Mar13) was $1,669.2 Mil.
Long-Term Debt was $779.3 Mil.
Total Current Assets was $1,588.3 Mil.
Total Current Liabilities was $81.0 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.

Colony Capital Inc's current net income (TTM) was 111.9. ==> 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.

Colony Capital Inc's current cash flow from operations (TTM) was 157.4. ==> 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 (Mar14)
=111.948/3165.264
=0.03536767

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=104.088/1669.186
=0.06235854

Colony Capital Inc's return on assets of this year was 0.03536767. Colony Capital Inc's return on assets of last year was 0.06235854. ==> Last year is higher ==> Score 0.

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.

Colony Capital Inc's current net income (TTM) was 111.9. Colony Capital Inc's current cash flow from operations (TTM) was 157.4. ==> 157.4 > 111.9 ==> CFROA > ROA ==> Score 1.

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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=2657.949/4581.2702
=0.58017731

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=779.278/2335.3868
=0.33368263

Colony Capital Inc's gearing of this year was 0.58017731. Colony Capital Inc's gearing of last year was 0.33368263. ==> Last year is lower than this year ==> Score 0.

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: Mar15)=Total Current Assets/Total Current Liabilities
=2211.193/617.775
=3.57928534

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=1588.256/81.006
=19.60664642

Colony Capital Inc's current ratio of this year was 3.57928534. Colony Capital Inc's current ratio of last year was 19.60664642. ==> Last year's current ratio is higher ==> Score 0.

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.

Colony Capital Inc's number of shares in issue this year was 109.4. Colony Capital Inc's number of shares in issue last year was 81. ==> 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
=345.464/345.464
=1

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=205.861/205.861
=1

Colony Capital Inc's gross margin of this year was 1. Colony Capital Inc's gross margin of last year was 1. ==> Last year's gross margin is higher ==> Score 0.

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 (Mar14)
=345.464/3165.264
=0.10914224

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=205.861/1669.186
=0.12333017

Colony Capital Inc's asset turnover of this year was 0.10914224. Colony Capital Inc's asset turnover of last year was 0.12333017. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

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

Colony Capital Inc has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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.

Colony Capital Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 11
Question 2 11
Question 3 00
Question 4 11
Question 5 00
Question 6 01
Question 7 00
Question 8 00
Question 9 00
F-score 34

Colony Capital Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 0100000000
Question 4 1111111111
Question 5 0010000000
Question 6 1100011110
Question 7 0000000000
Question 8 0000000000
Question 9 0110000000
F-score 4653344443
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