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M D C Holdings Inc (NYSE:MDC)
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 = 8 or 9
Bad or low score = 0 or 1

M D C Holdings Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

MDC' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 7

1
8

During the past 13 years, the highest Piotroski F-Score of M D C Holdings Inc was 8. The lowest was 1. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 11.504 + 30.709 + 36.251 + 224.909 = $303 Mil.
Cash Flow from Operations was -114.248 + -43.689 + -79.617 + -90.825 = $-328 Mil.
Revenue was 318.534 + 420.903 + 448 + 416.018 = $1,603 Mil.
Gross Profit was 59.056 + 39.757 + 92.726 + 86.656 = $278 Mil.
Total Assets at the begining of this year (Mar13) was $2,142 Mil.
Total Assets was $2,550 Mil.
Long-Term Debt was $1,096 Mil.
Total Current Assets was $2,202 Mil.
Total Current Liabilities was $205 Mil.
Net Income was 22.516 + 29.67 + 20.126 + 10.638 = $83 Mil.

Revenue was 331.748 + 358.891 + 334.33 + 268.934 = $1,294 Mil.
Gross Profit was 57.672 + 32.994 + 63.261 + 46.996 = $201 Mil.
Total Assets at the begining of last year (Mar12) was $1,826 Mil.
Total Assets was $2,142 Mil.
Long-Term Debt was $995 Mil.
Total Current Assets was $1,966 Mil.
Total Current Liabilities was $233 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.

M D C Holdings Inc's current net income was 303. ==> 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.

M D C Holdings Inc's current cash flow from operations was -328. ==> Negative ==> Score 0.

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)
=303.373/2142.334
=0.14160864

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=82.95/1825.571
=0.04543784

M D C Holdings Inc's return on assets of this year was 0.14160864. M D C Holdings Inc's return on assets of last year was 0.04543784. ==> 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.

M D C Holdings Inc's current net income was 303. M D C Holdings Inc's current cash flow from operations was -328. ==> -328 =< 303 ==> CFROA =< ROA ==> Score 0.

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
=1095.958/2550.237
=0.42974751

Gearing (Last Year)=Long-Term Debt/Total Assets
=995.032/2142.334
=0.46446166

M D C Holdings Inc's gearing of this year was 0.42974751. M D C Holdings Inc's gearing of last year was 0.46446166. ==> 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)=Total Current Assets/Total Current Liabilities
=2201.844/205.25
=10.72761998

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1966.189/232.859
=8.4436891

M D C Holdings Inc's current ratio of this year was 10.72761998. M D C Holdings Inc's current ratio of last year was 8.4436891. ==> 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.

M D C Holdings Inc's number of shares in issue this year was 48.9. 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

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
=278.195/1603.455
=0.17349723

Gross Margin (Last Year)=Gross Profit/Revenue
=200.923/1293.903
=0.15528444

M D C Holdings Inc's gross margin of this year was 0.17349723. M D C Holdings Inc's gross margin of last year was 0.15528444. ==> 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)
=1603.455/2142.334
=0.74846172

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=1293.903/1825.571
=0.70876619

M D C Holdings Inc's asset turnover of this year was 0.74846172. M D C Holdings Inc's asset turnover of last year was 0.70876619. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

M D C Holdings Inc has an F-score of 7 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1110010011
Q2 0011110000
Q3 1000110011
Q4 0011110100
Q5 0010000110
Q6 1111111001
Q7 0011001000
Q8 1100010011
Q9 1000001011
F-score 5364463255

M D C Holdings Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 0001111111
Q2 0000000000
Q3 0011111111
Q4 1110000000
Q5 1111100001
Q6 0000011111
Q7 0000000001
Q8 0011111111
Q9 0011111111
F-score 2255555557
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