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Health Net Inc (NYSE:HNT)
Piotroski F-Score
7 (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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Health Net Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

HNT' s 10-Year Piotroski F-Score Range
Min: 1   Max: 9
Current: 7

1
9

During the past 13 years, the highest Piotroski F-Score of Health Net Inc was 9. The lowest was 1. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 19.753 + 28.787 + 120.867 + -8.939 = $160 Mil.
Cash Flow from Operations was -71.886 + 311.458 + -13.75 + 587.955 = $814 Mil.
Revenue was 2743.244 + 3038.935 + 3421.392 + 3789.87 = $12,993 Mil.
Gross Profit was 389.203 + 504.619 + 525.005 + 561.457 = $1,980 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(4041.501 + 3929.125 + 4430.619 + 4777.025 + 4962.904) / 5 = $4428.2348 Mil.
Total Assets at the begining of this year (Sep13) was $4,042 Mil.
Long-Term Debt was $499 Mil.
Total Current Assets was $4,088 Mil.
Total Current Liabilities was $2,462 Mil.
Net Income was 6.011 + 50.05 + 33.483 + 66.84 = $156 Mil.

Revenue was 2837.782 + 2797.037 + 2738.431 + 2775.031 = $11,148 Mil.
Gross Profit was 367.428 + 402.826 + 419.113 + 453.136 = $1,643 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(3810.303 + 3934.39 + 3875.307 + 3881.453 + 4041.501) / 5 = $3908.5908 Mil.
Total Assets at the begining of last year (Sep12) was $3,810 Mil.
Long-Term Debt was $499 Mil.
Total Current Assets was $3,056 Mil.
Total Current Liabilities was $1,720 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.

Health Net Inc's current net income (TTM) was 160. ==> 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.

Health Net Inc's current cash flow from operations (TTM) was 814. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Sep13)
=160.468/4041.501
=0.03970505

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=156.384/3810.303
=0.04104241

Health Net Inc's return on assets of this year was 0.03970505. Health Net Inc's return on assets of last year was 0.04104241. ==> 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.

Health Net Inc's current net income (TTM) was 160. Health Net Inc's current cash flow from operations (TTM) was 814. ==> 814 > 160 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=499.453/4428.2348
=0.11278828

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=499.248/3908.5908
=0.12773095

Health Net Inc's gearing of this year was 0.11278828. Health Net Inc's gearing of last year was 0.12773095. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=4088.434/2462.434
=1.66032227

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=3056.32/1719.512
=1.77743453

Health Net Inc's current ratio of this year was 1.66032227. Health Net Inc's current ratio of last year was 1.77743453. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Health Net Inc's number of shares in issue this year was 80.2. Health Net Inc's number of shares in issue last year was 80.4. ==> 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: TTM)=Gross Profit/Revenue
=1980.284/12993.441
=0.15240643

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1642.503/11148.281
=0.1473324

Health Net Inc's gross margin of this year was 0.15240643. Health Net Inc's gross margin of last year was 0.1473324. ==> This year's gross margin is higher. ==> Score 1.

Q9. 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 (Sep13)
=12993.441/4041.501
=3.21500378

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=11148.281/3810.303
=2.92582532

Health Net Inc's asset turnover of this year was 3.21500378. Health Net Inc's asset turnover of last year was 2.92582532. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+0+1+1+1
=7

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

Health Net Inc has an F-score of 7. 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.

Health Net Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111101111
Q2 0111011111
Q3 0110001011
Q4 0001011100
Q5 1110011001
Q6 0101111100
Q7 1001111111
Q8 0111011101
Q9 1011010010
F-score 4667378656

Health Net Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1011011111
Q3 1111001010
Q4 1000010111
Q5 0111011111
Q6 1101100000
Q7 1111111001
Q8 0000111111
Q9 1111010111
F-score 7667476677
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