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DST Systems, Inc. (NYSE:DST)
Piotroski F-Score
9 (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 = 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: 3   Max: 9
Current: 9

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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 100.4 + 84 + 96.9 + 78.5 = $360 Mil.
Cash Flow from Operations was 71.3 + 61.3 + 90.3 + 201.4 = $424 Mil.
Revenue was 683.8 + 667.3 + 651.8 + 657.1 = $2,660 Mil.
Gross Profit was 100.1 + 122.5 + 120.4 + 105.8 = $449 Mil.
Total Assets at the begining of this year (Mar13) was $3,417 Mil.
Total Assets was $3,076 Mil.
Long-Term Debt was $387 Mil.
Total Current Assets was $932 Mil.
Total Current Liabilities was $1,050 Mil.
Net Income was 93.2 + 37.9 + 85.9 + 144.9 = $362 Mil.

Revenue was 682.4 + 658.6 + 632 + 632.8 = $2,606 Mil.
Gross Profit was 107.8 + 98.8 + 87.6 + 93.2 = $387 Mil.
Total Assets at the begining of last year (Mar12) was $3,594 Mil.
Total Assets was $3,417 Mil.
Long-Term Debt was $474 Mil.
Total Current Assets was $931 Mil.
Total Current Liabilities was $1,354 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 360. ==> 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 424. ==> 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)
=359.8/3417.3
=0.1052878

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=361.9/3594.3
=0.1006872

DST Systems, Inc.'s return on assets of this year was 0.1052878. DST Systems, Inc.'s return on assets of last year was 0.1006872. ==> 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 360. DST Systems, Inc.'s current cash flow from operations was 424. ==> 424 > 360 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=387.2/3076
=0.12587776

Gearing (Last Year)=Long-Term Debt/Total Assets
=473.9/3417.3
=0.13867673

DST Systems, Inc.'s gearing of this year was 0.12587776. DST Systems, Inc.'s gearing of last year was 0.13867673. ==> This year is lower or equal to last year. ==> 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
=932/1050.4
=0.88728104

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=930.5/1354.2
=0.68712155

DST Systems, Inc.'s current ratio of this year was 0.88728104. DST Systems, Inc.'s current ratio of last year was 0.68712155. ==> 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 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 42.4. DST Systems, Inc.'s number of shares in issue last year was 45.6. ==> There is smaller number of shares in issue this year, or the same. ==> 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
=448.8/2660
=0.1687218

Gross Margin (Last Year)=Gross Profit/Revenue
=387.4/2605.8
=0.14866836

DST Systems, Inc.'s gross margin of this year was 0.1687218. DST Systems, Inc.'s gross margin of last year was 0.14866836. ==> 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)
=2660/3417.3
=0.7783923

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=2605.8/3594.3
=0.72498122

DST Systems, Inc.'s asset turnover of this year was 0.7783923. DST Systems, Inc.'s asset turnover of last year was 0.72498122. ==> 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0011110111
Q4 1100011110
Q5 0111110110
Q6 0000011111
Q7 1110011111
Q8 0000011111
Q9 0011000111
F-score 4565486997
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