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Mueller Industries Inc (NYSE:MLI)
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

Mueller Industries Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

MLI' s 10-Year Piotroski F-Score Range
Min: 5   Max: 8
Current: 7

5
8

During the past 13 years, the highest Piotroski F-Score of Mueller Industries Inc was 8. The lowest was 5. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 15.384 + 39.864 + 91.15 + 26.202 = $173 Mil.
Cash Flow from Operations was 58.523 + 20.836 + 64.069 + -14.915 = $129 Mil.
Revenue was 487.715 + 528.854 + 582.282 + 559.69 = $2,159 Mil.
Gross Profit was 65.903 + 72.552 + 81.157 + 76.84 = $296 Mil.
Total Assets at the begining of this year (Dec12) was $1,104 Mil.
Total Assets was $1,248 Mil.
Long-Term Debt was $206 Mil.
Total Current Assets was $875 Mil.
Total Current Liabilities was $219 Mil.
Net Income was 16.368 + 15.511 + 17.917 + 32.599 = $82 Mil.

Revenue was 504.006 + 514.165 + 594.099 + 577.668 = $2,190 Mil.
Gross Profit was 65.287 + 64.447 + 71.248 + 84.493 = $285 Mil.
Total Assets at the begining of last year (Dec11) was $1,348 Mil.
Total Assets was $1,104 Mil.
Long-Term Debt was $207 Mil.
Total Current Assets was $747 Mil.
Total Current Liabilities was $259 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.

Mueller Industries Inc's current net income was 173. ==> 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.

Mueller Industries Inc's current cash flow from operations was 129. ==> 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 (Dec12)
=172.6/1104.155
=0.15631863

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=82.395/1347.604
=0.06114185

Mueller Industries Inc's return on assets of this year was 0.15631863. Mueller Industries Inc's return on assets of last year was 0.06114185. ==> 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.

Mueller Industries Inc's current net income was 173. Mueller Industries Inc's current cash flow from operations was 129. ==> 129 =< 173 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=206.25/1247.767
=0.16529528

Gearing (Last Year)=Long-Term Debt/Total Assets
=207.3/1104.155
=0.18774538

Mueller Industries Inc's gearing of this year was 0.16529528. Mueller Industries Inc's gearing of last year was 0.18774538. ==> This year is lower. ==> 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
=874.717/219.256
=3.98947805

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=747.194/258.696
=2.88830906

Mueller Industries Inc's current ratio of this year was 3.98947805. Mueller Industries Inc's current ratio of last year was 2.88830906. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Mueller Industries Inc's number of shares in issue this year was 56.6. Mueller Industries Inc's number of shares in issue last year was 56.2. ==> There is more number of shares in issue this year. ==> Score 0.

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
=296.452/2158.541
=0.13733906

Gross Margin (Last Year)=Gross Profit/Revenue
=285.475/2189.938
=0.13035757

Mueller Industries Inc's gross margin of this year was 0.13733906. Mueller Industries Inc's gross margin of last year was 0.13035757. ==> 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 (Dec12)
=2158.541/1104.155
=1.95492571

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2189.938/1347.604
=1.62506048

Mueller Industries Inc's asset turnover of this year was 1.95492571. Mueller Industries Inc's asset turnover of last year was 1.62506048. ==> 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+0+1+1+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Mueller Industries 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.

Mueller Industries Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1110001001
Q4 1101110110
Q5 0111111101
Q6 0010111101
Q7 1001000011
Q8 1000010011
Q9 1110001101
F-score 7665566658

Mueller Industries Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1000000111
Q4 0111111000
Q5 1111000011
Q6 1110000011
Q7 0000111110
Q8 0000111111
Q9 1100000111
F-score 6654555687
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