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Investors Real Estate Trust (NYSE:IRET)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Investors Real Estate Trust has an F-score of 6 indicating the company's financial situation is typical for a stable company.

IRET' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of Investors Real Estate Trust was 8. The lowest was 3. 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 own currency.

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Net Income was 16.666 + 39.797 + 11.003 + -21.643 = $45.8 Mil.
Cash Flow from Operations was 9.536 + 12.621 + 19.554 + 15.755 = $57.5 Mil.
Revenue was 52.27 + 55.772 + 29.322 + 49.611 = $187.0 Mil.
Gross Profit was 37.672 + 40.767 + 13.218 + 33.554 = $125.2 Mil.
Average Total Assets from the begining of this year (Jul15)
to the end of this year (Jul16) was
(2024.673 + 1781.953 + 1695.809 + 1760.177 + 1691.543) / 5 = $1790.831 Mil.
Total Assets at the begining of this year (Jul15) was $2,024.7 Mil.
Long-Term Debt was $890.6 Mil.
Total Current Assets was $67.4 Mil.
Total Current Liabilities was $135.5 Mil.
Net Income was 5.114 + 8.371 + 10.753 + 4.54 = $28.8 Mil.

Revenue was 70.885 + 52.939 + 25.979 + 45.045 = $194.8 Mil.
Gross Profit was 53.259 + 39.495 + 11.024 + 31.557 = $135.3 Mil.
Average Total Assets from the begining of last year (Jul14)
to the end of last year (Jul15) was
(1931.767 + 1961.47 + 2001.342 + 1997.837 + 2024.673) / 5 = $1983.4178 Mil.
Total Assets at the begining of last year (Jul14) was $1,931.8 Mil.
Long-Term Debt was $835.6 Mil.
Total Current Assets was $73.2 Mil.
Total Current Liabilities was $452.8 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.

Investors Real Estate Trust's current net income (TTM) was 45.8. ==> 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.

Investors Real Estate Trust's current cash flow from operations (TTM) was 57.5. ==> 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 (Jul15)
=45.823/2024.673
=0.0226323

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=28.778/1931.767
=0.01489724

Investors Real Estate Trust's return on assets of this year was 0.0226323. Investors Real Estate Trust's return on assets of last year was 0.01489724. ==> 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.

Investors Real Estate Trust's current net income (TTM) was 45.8. Investors Real Estate Trust's current cash flow from operations (TTM) was 57.5. ==> 57.5 > 45.8 ==> 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: Jul16)=Long-Term Debt/Average Total Assets from Jul15 to Jul16
=890.563/1790.831
=0.49729036

Gearing (Last Year: Jul15)=Long-Term Debt/Average Total Assets from Jul14 to Jul15
=835.607/1983.4178
=0.42129651

Investors Real Estate Trust's gearing of this year was 0.49729036. Investors Real Estate Trust's gearing of last year was 0.42129651. ==> Last year is lower than this year ==> Score 0.

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: Jul16)=Total Current Assets/Total Current Liabilities
=67.404/135.492
=0.49747587

Current Ratio (Last Year: Jul15)=Total Current Assets/Total Current Liabilities
=73.199/452.818
=0.16165214

Investors Real Estate Trust's current ratio of this year was 0.49747587. Investors Real Estate Trust's current ratio of last year was 0.16165214. ==> 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.

Investors Real Estate Trust's number of shares in issue this year was 137.4. Investors Real Estate Trust's number of shares in issue last year was 138.8. ==> 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
=125.211/186.975
=0.66966707

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=135.335/194.848
=0.69456705

Investors Real Estate Trust's gross margin of this year was 0.66966707. Investors Real Estate Trust's gross margin of last year was 0.69456705. ==> 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 (Jul15)
=186.975/2024.673
=0.09234825

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=194.848/1931.767
=0.10086517

Investors Real Estate Trust's asset turnover of this year was 0.09234825. Investors Real Estate Trust's asset turnover of last year was 0.10086517. ==> Last year's asset turnover is higher ==> Score 0.

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+0+1+1+0+0
=6

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

Investors Real Estate Trust has an F-score of 6 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.

Investors Real Estate Trust Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
Question 1 1111111011
Question 2 1111111111
Question 3 1000101011
Question 4 1111111110
Question 5 0111101110
Question 6 1001001001
Question 7 0000000000
Question 8 0000011000
Question 9 1001011000
F-score 6446558354

Investors Real Estate Trust Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Question 1 0000111111
Question 2 1111111111
Question 3 0000111111
Question 4 1111111101
Question 5 1111111100
Question 6 0000000111
Question 7 0000000001
Question 8 0000000000
Question 9 0000000000
F-score 3333555646
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