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DST Systems, Inc. (NYSE:DST)
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

DST Systems, Inc. has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

DST' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of DST Systems, Inc. was 9. The lowest was 3. And the median was 6.


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 137.8 + 100 + 255.1 + 107.8 = $601 Mil.
Cash Flow from Operations was 57 + 95.5 + 88.7 + 12.3 = $254 Mil.
Revenue was 679.5 + 679.5 + 706.5 + 702.3 = $2,768 Mil.
Gross Profit was 103.4 + 116.2 + 120.2 + 108.5 = $448 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(3076 + 2993.3 + 2888.9 + 2942.9 + 2708.7) / 5 = $2921.96 Mil.
Total Assets at the begining of this year (Mar14) was $3,076 Mil.
Long-Term Debt was $339 Mil.
Total Current Assets was $867 Mil.
Total Current Liabilities was $905 Mil.
Net Income was 78.5 + 96.9 + 84 + 100.4 = $360 Mil.

Revenue was 657.1 + 651.8 + 667.3 + 683.8 = $2,660 Mil.
Gross Profit was 105.8 + 120.4 + 122.5 + 100.1 = $449 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(3417.3 + 3347.4 + 3103.3 + 3090.5 + 3076) / 5 = $3206.9 Mil.
Total Assets at the begining of last year (Mar13) was $3,417 Mil.
Long-Term Debt was $387 Mil.
Total Current Assets was $932 Mil.
Total Current Liabilities was $1,050 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.

DST Systems, Inc.'s current net income (TTM) was 601. ==> 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.

DST Systems, Inc.'s current cash flow from operations (TTM) was 254. ==> 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 (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=359.8/3417.3
=0.1052878

DST Systems, Inc.'s return on assets of this year was 0.19528609. DST Systems, Inc.'s return on assets of last year was 0.1052878. ==> 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.

DST Systems, Inc.'s current net income (TTM) was 601. DST Systems, Inc.'s current cash flow from operations (TTM) was 254. ==> 254 <= 601 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=339.2/2921.96
=0.11608646

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=387.2/3206.9
=0.12073966

DST Systems, Inc.'s gearing of this year was 0.11608646. DST Systems, Inc.'s gearing of last year was 0.12073966. ==> 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: Mar15)=Total Current Assets/Total Current Liabilities
=867.1/904.8
=0.95833333

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=932/1050.4
=0.88728104

DST Systems, Inc.'s current ratio of this year was 0.95833333. DST Systems, Inc.'s current ratio of last year was 0.88728104. ==> 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.

DST Systems, Inc.'s number of shares in issue this year was 37.6. DST Systems, Inc.'s number of shares in issue last year was 42.4. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=448.3/2767.8
=0.1619698

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=448.8/2660
=0.1687218

DST Systems, Inc.'s gross margin of this year was 0.1619698. DST Systems, Inc.'s gross margin of last year was 0.1687218. ==> 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)
=2767.8/3076
=0.89980494

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=2660/3417.3
=0.7783923

DST Systems, Inc.'s asset turnover of this year was 0.89980494. DST Systems, Inc.'s asset turnover of last year was 0.7783923. ==> 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+1+0+1
=7

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

DST Systems, Inc. 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.

DST Systems, Inc. Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1010110111
Question 4 0101111010
Question 5 1110100110
Question 6 0011010011
Question 7 1111111111
Question 8 1011010010
Question 9 0010100111
F-score 6586774696

DST Systems, Inc. Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 1110111111
Question 4 0011110000
Question 5 1110110101
Question 6 0011111011
Question 7 0011111111
Question 8 0011111000
Question 9 1000111111
F-score 5486997667
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