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GuruFocus has detected 5 Warning Signs with Fortress Investment Group LLC $FIG.
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Fortress Investment Group LLC (NYSE:FIG)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

Fortress Investment Group LLC has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

FIG' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 8

4
8

During the past 13 years, the highest Piotroski F-Score of Fortress Investment Group LLC was 8. The lowest was 4. And the median was 5.


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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was -8.526 + -14.445 + 31.162 + 86.251 = $94 Mil.
Cash Flow from Operations was -135.94 + 154.089 + 153.56 + 83.419 = $255 Mil.
Revenue was 231.617 + 232.706 + 261.145 + 438.338 = $1,164 Mil.
Gross Profit was 231.617 + 232.706 + 261.145 + 438.338 = $1,164 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(2275.281 + 2008.289 + 1983.177 + 2057.915 + 2201.374) / 5 = $2105.2072 Mil.
Total Assets at the begining of this year (Dec15) was $2,275 Mil.
Long-Term Debt was $183 Mil.
Total Current Assets was $718 Mil.
Total Current Liabilities was $758 Mil.
Net Income was 34.713 + 3.316 + -14.245 + 54.708 = $78 Mil.

Revenue was 226.689 + 308.488 + 264.019 + 414.66 = $1,214 Mil.
Gross Profit was 226.689 + 308.488 + 264.019 + 414.66 = $1,214 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(2502.384 + 2187.361 + 2208.956 + 2276.714 + 2275.281) / 5 = $2290.1392 Mil.
Total Assets at the begining of last year (Dec14) was $2,502 Mil.
Long-Term Debt was $231 Mil.
Total Current Assets was $614 Mil.
Total Current Liabilities was $714 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.

Fortress Investment Group LLC's current net income (TTM) was 94. ==> 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.

Fortress Investment Group LLC's current cash flow from operations (TTM) was 255. ==> 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 (Dec15)
=94.442/2275.281
=0.04150784

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=78.492/2502.384
=0.03136689

Fortress Investment Group LLC's return on assets of this year was 0.04150784. Fortress Investment Group LLC's return on assets of last year was 0.03136689. ==> 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.

Fortress Investment Group LLC's current net income (TTM) was 94. Fortress Investment Group LLC's current cash flow from operations (TTM) was 255. ==> 255 > 94 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=182.838/2105.2072
=0.08685036

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=230.677/2290.1392
=0.10072619

Fortress Investment Group LLC's gearing of this year was 0.08685036. Fortress Investment Group LLC's gearing of last year was 0.10072619. ==> 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: Dec16)=Total Current Assets/Total Current Liabilities
=717.758/757.559
=0.94746152

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=613.653/713.615
=0.85992167

Fortress Investment Group LLC's current ratio of this year was 0.94746152. Fortress Investment Group LLC's current ratio of last year was 0.85992167. ==> 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.

Fortress Investment Group LLC's number of shares in issue this year was 390.3. Fortress Investment Group LLC's number of shares in issue last year was 442.7. ==> 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
=1163.806/1163.806
=1

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1213.856/1213.856
=1

Fortress Investment Group LLC's gross margin of this year was 1. Fortress Investment Group LLC'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 (Dec15)
=1163.806/2275.281
=0.5114999

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=1213.856/2502.384
=0.48507983

Fortress Investment Group LLC's asset turnover of this year was 0.5114999. Fortress Investment Group LLC's asset turnover of last year was 0.48507983. ==> 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+1+1+1+1+0+1
=8

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

Fortress Investment Group LLC has an F-score of 8. 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 local exchange's currency.

Fortress Investment Group LLC Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 000011111
Question 2 111111111
Question 3 010111001
Question 4 111111111
Question 5 101111001
Question 6 001001101
Question 7 000001111
Question 8 000000100
Question 9 111011011
F-score 445468658

Fortress Investment Group LLC Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 1000000011
Question 4 1111111111
Question 5 0011100001
Question 6 1100001111
Question 7 1110111101
Question 8 0111100000
Question 9 1000011111
F-score 7665656668
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