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M.D.C. Holdings Inc (NYSE:MDC)
Piotroski F-Score
5 (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

M.D.C. Holdings Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

MDC' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 5

2
8

During the past 13 years, the highest Piotroski F-Score of M.D.C. Holdings Inc was 8. The lowest was 2. 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 (Mar16) TTM:Last Year (Mar15) TTM:
Net Income was 19.998 + 14.778 + 22.595 + 9.563 = $67 Mil.
Cash Flow from Operations was 29.083 + -70.995 + 26.701 + -14.985 = $-30 Mil.
Revenue was 473.128 + 468.487 + 530.101 + 396.744 = $1,868 Mil.
Gross Profit was 83.902 + 81.905 + 70.185 + 65.055 = $301 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(2316.435 + 2351.936 + 2350.868 + 2415.899 + 2385.806) / 5 = $2364.1888 Mil.
Total Assets at the begining of this year (Mar15) was $2,316 Mil.
Long-Term Debt was $901 Mil.
Total Current Assets was $2,068 Mil.
Total Current Liabilities was $226 Mil.
Net Income was 21.542 + 15.458 + 14.639 + 8.42 = $60 Mil.

Revenue was 442.752 + 418.403 + 461.719 + 377.919 = $1,701 Mil.
Gross Profit was 79.59 + 72.738 + 65.008 + 57.802 = $275 Mil.
Average Total Assets from the begining of last year (Mar14)
to the end of last year (Mar15) was
(2550.237 + 2596.561 + 2588.215 + 2351.456 + 2316.435) / 5 = $2480.5808 Mil.
Total Assets at the begining of last year (Mar14) was $2,550 Mil.
Long-Term Debt was $847 Mil.
Total Current Assets was $1,977 Mil.
Total Current Liabilities was $243 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.

M.D.C. Holdings Inc's current net income (TTM) was 67. ==> 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.

M.D.C. Holdings Inc's current cash flow from operations (TTM) was -30. ==> Negative ==> Score 0.

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 (Mar15)
=66.934/2316.435
=0.02889526

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=60.059/2550.237
=0.02355036

M.D.C. Holdings Inc's return on assets of this year was 0.02889526. M.D.C. Holdings Inc's return on assets of last year was 0.02355036. ==> 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.

M.D.C. Holdings Inc's current net income (TTM) was 67. M.D.C. Holdings Inc's current cash flow from operations (TTM) was -30. ==> -30 <= 67 ==> CFROA <= ROA ==> Score 0.

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: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=901.019/2364.1888
=0.38111127

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=846.6/2480.5808
=0.34129104

M.D.C. Holdings Inc's gearing of this year was 0.38111127. M.D.C. Holdings Inc's gearing of last year was 0.34129104. ==> 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: Mar16)=Total Current Assets/Total Current Liabilities
=2068.416/226.493
=9.13236171

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=1977.422/243.372
=8.12510067

M.D.C. Holdings Inc's current ratio of this year was 9.13236171. M.D.C. Holdings Inc's current ratio of last year was 8.12510067. ==> 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.

M.D.C. Holdings Inc's number of shares in issue this year was 48.8. M.D.C. Holdings Inc's number of shares in issue last year was 48.9. ==> 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
=301.047/1868.46
=0.16112039

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=275.138/1700.793
=0.16177042

M.D.C. Holdings Inc's gross margin of this year was 0.16112039. M.D.C. Holdings Inc's gross margin of last year was 0.16177042. ==> 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 (Mar15)
=1868.46/2316.435
=0.80661016

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=1700.793/2550.237
=0.66691566

M.D.C. Holdings Inc's asset turnover of this year was 0.80661016. M.D.C. Holdings Inc's asset turnover of last year was 0.66691566. ==> 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+0+1+0+0+1+1+0+1
=5

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

M.D.C. Holdings Inc 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.

M.D.C. Holdings Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1001001111
Question 2 1111000001
Question 3 0011001101
Question 4 1111010000
Question 5 1000010010
Question 6 1111100111
Question 7 1100100010
Question 8 0001001100
Question 9 0000101101
F-score 6446324545

M.D.C. Holdings Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Question 1 1111111111
Question 2 0000000010
Question 3 1100000011
Question 4 0000000000
Question 5 0111111100
Question 6 1111100011
Question 7 0110100001
Question 8 1110000000
Question 9 1100001111
F-score 5753423355
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