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DST Systems, Inc. (NYSE:DST)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, 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

DST Systems, Inc. has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

DST' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 9

4
9

During the past 13 years, the highest Piotroski F-Score of DST Systems, Inc. was 9. The lowest was 4. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 84 + 96.9 + 78.5 + 93.2 = $353 Mil.
Cash Flow from Operations was 61.3 + 90.3 + 201.4 + 42.2 = $395 Mil.
Revenue was 667.3 + 651.8 + 657.1 + 682.4 = $2,659 Mil.
Gross Profit was 122.5 + 120.4 + 105.8 + 107.8 = $457 Mil.
Total Assets at the begining of this year (Dec12) was $3,393 Mil.
Total Assets was $3,091 Mil.
Long-Term Debt was $399 Mil.
Total Current Assets was $842 Mil.
Total Current Liabilities was $1,073 Mil.
Net Income was 37.9 + 85.9 + 144.9 + 55.3 = $324 Mil.

Revenue was 658.6 + 632 + 632.8 + 653.2 = $2,577 Mil.
Gross Profit was 98.8 + 87.6 + 93.2 + 94.1 = $374 Mil.
Total Assets at the begining of last year (Dec11) was $3,429 Mil.
Total Assets was $3,393 Mil.
Long-Term Debt was $492 Mil.
Total Current Assets was $954 Mil.
Total Current Liabilities was $1,379 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.

DST Systems, Inc.'s current net income was 353. ==> 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.

DST Systems, Inc.'s current cash flow from operations was 395. ==> 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 (Dec12)
=352.6/3392.5
=0.10393515

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=324/3428.6
=0.09449921

DST Systems, Inc.'s return on assets of this year was 0.10393515. DST Systems, Inc.'s return on assets of last year was 0.09449921. ==> 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.

DST Systems, Inc.'s current net income was 353. DST Systems, Inc.'s current cash flow from operations was 395. ==> 395 > 353 ==> 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
=399.4/3090.5
=0.12923475

Gearing (Last Year)=Long-Term Debt/Total Assets
=492.2/3392.5
=0.14508475

DST Systems, Inc.'s gearing of this year was 0.12923475. DST Systems, Inc.'s gearing of last year was 0.14508475. ==> 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
=842.4/1072.8
=0.7852349

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=954.3/1378.5
=0.69227421

DST Systems, Inc.'s current ratio of this year was 0.7852349. DST Systems, Inc.'s current ratio of last year was 0.69227421. ==> 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.

DST Systems, Inc.'s number of shares in issue this year was 42.9. DST Systems, Inc.'s number of shares in issue last year was 46.4. ==> There is the same number of shares in issue this year, or fewer. ==> Score 1.

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
=456.5/2658.6
=0.17170691

Gross Margin (Last Year)=Gross Profit/Revenue
=373.7/2576.6
=0.14503609

DST Systems, Inc.'s gross margin of this year was 0.17170691. DST Systems, Inc.'s gross margin of last year was 0.14503609. ==> 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 (Dec12)
=2658.6/3392.5
=0.78366986

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2576.6/3428.6
=0.75150207

DST Systems, Inc.'s asset turnover of this year was 0.78366986. DST Systems, Inc.'s asset turnover of last year was 0.75150207. ==> 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+1+1+1
=9

Good or high score = 8 or 9

Bad or low score = 0 or 1

DST Systems, Inc. has an F-score of 9. 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0101011011
Q4 1010111101
Q5 1111010011
Q6 0001101001
Q7 1111111111
Q8 1101101001
Q9 0001010011
F-score 6658677469

DST Systems, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 0000111101
Q4 1111000111
Q5 1001111101
Q6 0000000111
Q7 1111100111
Q8 0000000111
Q9 1000110001
F-score 6445654869
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