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EMCOR Group, Inc. (NYSE:EME)
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 = 8 or 9
Bad or low score = 0 or 1

EMCOR Group, Inc. has an F-score of 3 indicating the company's financial situation is typical for a stable company.

EME' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 3

3
8

During the past 13 years, the highest Piotroski F-Score of EMCOR Group, Inc. was 8. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 45.921 + 26.69 + 21.014 + 30.167 = $124 Mil.
Cash Flow from Operations was 82.022 + 120.258 + 42.891 + -95.102 = $150 Mil.
Revenue was 1662.937 + 1629.067 + 1556.753 + 1568.401 = $6,417 Mil.
Gross Profit was 234.075 + 206.31 + 181.535 + 191.138 = $813 Mil.
Total Assets at the begining of this year (Dec12) was $3,107 Mil.
Total Assets was $3,466 Mil.
Long-Term Debt was $335 Mil.
Total Current Assets was $1,930 Mil.
Total Current Liabilities was $1,299 Mil.
Net Income was 46.41 + 39.581 + 33.448 + 27.145 = $147 Mil.

Revenue was 1611.881 + 1606.242 + 1590.035 + 1538.521 = $6,347 Mil.
Gross Profit was 228.449 + 203.248 + 193.964 + 180.693 = $806 Mil.
Total Assets at the begining of last year (Dec11) was $3,014 Mil.
Total Assets was $3,107 Mil.
Long-Term Debt was $154 Mil.
Total Current Assets was $2,044 Mil.
Total Current Liabilities was $1,295 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.

EMCOR Group, Inc.'s current net income was 124. ==> 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.

EMCOR Group, Inc.'s current cash flow from operations was 150. ==> 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)
=123.792/3107.07
=0.03984204

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=146.584/3014.076
=0.04863315

EMCOR Group, Inc.'s return on assets of this year was 0.03984204. EMCOR Group, Inc.'s return on assets of last year was 0.04863315. ==> Last year is higher ==> Score 0.

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.

EMCOR Group, Inc.'s current net income was 124. EMCOR Group, Inc.'s current cash flow from operations was 150. ==> 150 > 124 ==> 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
=335.331/3465.915
=0.09675107

Gearing (Last Year)=Long-Term Debt/Total Assets
=154.112/3107.07
=0.04960043

EMCOR Group, Inc.'s gearing of this year was 0.09675107. EMCOR Group, Inc.'s gearing of last year was 0.04960043. ==> Last year is lower ==> Score 0.

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
=1930.105/1298.743
=1.48613313

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2044.453/1294.519
=1.57931479

EMCOR Group, Inc.'s current ratio of this year was 1.48613313. EMCOR Group, Inc.'s current ratio of last year was 1.57931479. ==> Last year's current ratio is higher ==> Score 0.

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.

EMCOR Group, Inc.'s number of shares in issue this year was 67.9. EMCOR Group, Inc.'s number of shares in issue last year was 67.8. ==> There is more number of shares in issue this year. ==> Score 0.

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
=813.058/6417.158
=0.12670064

Gross Margin (Last Year)=Gross Profit/Revenue
=806.354/6346.679
=0.12705133

EMCOR Group, Inc.'s gross margin of this year was 0.12670064. EMCOR Group, Inc.'s gross margin of last year was 0.12705133. ==> Last year's gross margin is higher ==> Score 0.

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)
=6417.158/3107.07
=2.06534066

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=6346.679/3014.076
=2.10567982

EMCOR Group, Inc.'s asset turnover of this year was 2.06534066. EMCOR Group, Inc.'s asset turnover of last year was 2.10567982. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+0+0+0
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

EMCOR Group, Inc. has an F-score of 3 indicating the company's financial situation is typical for a stable company.


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.

EMCOR Group, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111110111
Q2 1111111111
Q3 1111100110
Q4 1111111111
Q5 0010101110
Q6 1110111010
Q7 0000001010
Q8 0111110000
Q9 1011000110
F-score 6686755683

EMCOR Group, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1111011000
Q4 1110010111
Q5 1111111100
Q6 0001111100
Q7 0011110000
Q8 0000000010
Q9 1111111100
F-score 6677686643
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