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Hess Corp (NYSE:HES)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Hess Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

HES' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 5

3
9

During the past 13 years, the highest Piotroski F-Score of Hess Corp 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 386 + 1925 + 420 + 1431 = $4,162 Mil.
Cash Flow from Operations was 1158 + 1550 + 1254 + 1247 = $5,209 Mil.
Revenue was 5554 + 13101 + 2706 + 3011 = $24,372 Mil.
Gross Profit was 1985 + 2059 + 1619 + 1783 = $7,446 Mil.
Total Assets at the begining of this year (Mar13) was $42,379 Mil.
Total Assets was $41,424 Mil.
Long-Term Debt was $5,434 Mil.
Total Current Assets was $7,048 Mil.
Total Current Liabilities was $5,981 Mil.
Net Income was 1276 + 374 + 557 + 549 = $2,756 Mil.

Revenue was 6106 + 14089 + 3072 + 3324 = $26,591 Mil.
Gross Profit was 2118 + 2498 + 1742 + 2119 = $8,477 Mil.
Total Assets at the begining of last year (Mar12) was $40,647 Mil.
Total Assets was $42,379 Mil.
Long-Term Debt was $5,472 Mil.
Total Current Assets was $11,418 Mil.
Total Current Liabilities was $8,906 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.

Hess Corp's current net income was 4,162. ==> 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.

Hess Corp's current cash flow from operations was 5,209. ==> 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)
=4162/42379
=0.09820902

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=2756/40647
=0.06780328

Hess Corp's return on assets of this year was 0.09820902. Hess Corp's return on assets of last year was 0.06780328. ==> 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.

Hess Corp's current net income was 4,162. Hess Corp's current cash flow from operations was 5,209. ==> 5,209 > 4,162 ==> 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
=5434/41424
=0.13117999

Gearing (Last Year)=Long-Term Debt/Total Assets
=5472/42379
=0.12912055

Hess Corp's gearing of this year was 0.13117999. Hess Corp's gearing of last year was 0.12912055. ==> 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
=7048/5981
=1.17839826

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=11418/8906
=1.28205704

Hess Corp's current ratio of this year was 1.17839826. Hess Corp's current ratio of last year was 1.28205704. ==> 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.

Hess Corp's number of shares in issue this year was 322.6. Hess Corp's number of shares in issue last year was 342.6. ==> 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
=7446/24372
=0.30551452

Gross Margin (Last Year)=Gross Profit/Revenue
=8477/26591
=0.31879207

Hess Corp's gross margin of this year was 0.30551452. Hess Corp's gross margin of last year was 0.31879207. ==> 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 (Mar13)
=24372/42379
=0.57509616

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=26591/40647
=0.65419342

Hess Corp's asset turnover of this year was 0.57509616. Hess Corp's asset turnover of last year was 0.65419342. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+0+1+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Hess Corp has an F-score of 5 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.

Hess Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111101
Q3 1110101011
Q4 1111111100
Q5 1111100101
Q6 0010110001
Q7 0000000000
Q8 1010100011
Q9 1110101000
F-score 7684845436

Hess Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 0000111111
Q4 1111111101
Q5 1000011110
Q6 0000011110
Q7 0001000011
Q8 0011111000
Q9 0000000100
F-score 4345577765
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