Switch to:
The Hershey Co (NYSE:HSY)
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 = 8 or 9
Bad or low score = 0 or 1

The Hershey Co has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

HSY' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 8

4
9

During the past 13 years, the highest Piotroski F-Score of The Hershey Co was 9. The lowest was 4. 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 252.495 + 186.075 + 232.985 + 159.504 = $831 Mil.
Cash Flow from Operations was 203.757 + 564.691 + 274.268 + 56.266 = $1,099 Mil.
Revenue was 1871.813 + 1956.253 + 1853.886 + 1508.514 = $7,190 Mil.
Gross Profit was 871.49 + 857.386 + 855.551 + 718.574 = $3,303 Mil.
Total Assets at the begining of this year (Mar13) was $4,846 Mil.
Total Assets was $5,429 Mil.
Long-Term Debt was $1,794 Mil.
Total Current Assets was $2,545 Mil.
Total Current Liabilities was $1,444 Mil.
Net Income was 241.906 + 149.879 + 176.716 + 135.685 = $704 Mil.

Revenue was 1827.426 + 1751.035 + 1746.709 + 1414.444 = $6,740 Mil.
Gross Profit was 849.337 + 755.208 + 742.757 + 618.521 = $2,966 Mil.
Total Assets at the begining of last year (Mar12) was $4,599 Mil.
Total Assets was $4,846 Mil.
Long-Term Debt was $1,540 Mil.
Total Current Assets was $2,180 Mil.
Total Current Liabilities was $1,492 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.

The Hershey Co's current net income was 831. ==> 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.

The Hershey Co's current cash flow from operations was 1,099. ==> 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)
=831.059/4845.63
=0.1715069

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=704.186/4599.457
=0.15310199

The Hershey Co's return on assets of this year was 0.1715069. The Hershey Co's return on assets of last year was 0.15310199. ==> 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.

The Hershey Co's current net income was 831. The Hershey Co's current cash flow from operations was 1,099. ==> 1,099 > 831 ==> 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
=1793.5/5428.846
=0.33036487

Gearing (Last Year)=Long-Term Debt/Total Assets
=1539.8/4845.63
=0.31777086

The Hershey Co's gearing of this year was 0.33036487. The Hershey Co's gearing of last year was 0.31777086. ==> Last year is lower than this year ==> 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
=2544.974/1444.445
=1.7619044

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2180.021/1492.067
=1.46107447

The Hershey Co's current ratio of this year was 1.7619044. The Hershey Co's current ratio of last year was 1.46107447. ==> 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.

The Hershey Co's number of shares in issue this year was 227. The Hershey Co's number of shares in issue last year was 227.7. ==> 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
=3303.001/7190.466
=0.45935841

Gross Margin (Last Year)=Gross Profit/Revenue
=2965.823/6739.614
=0.44005829

The Hershey Co's gross margin of this year was 0.45935841. The Hershey Co's gross margin of last year was 0.44005829. ==> 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)
=7190.466/4845.63
=1.48390736

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=6739.614/4599.457
=1.46530645

The Hershey Co's asset turnover of this year was 1.48390736. The Hershey Co's asset turnover of last year was 1.46530645. ==> 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+0+1+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

The Hershey Co 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 own currency.

The Hershey Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111101
Q3 1010111111
Q4 1011111001
Q5 1000011010
Q6 0010111101
Q7 1111100111
Q8 1000111011
Q9 1101111010
F-score 8465888567

The Hershey Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 1100100111
Q4 0101111111
Q5 0011110000
Q6 1100001111
Q7 1111111101
Q8 0011111111
Q9 0001100001
F-score 5657866768
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide