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Magellan Midstream Partners, L.P. (NYSE:MMP)
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

Magellan Midstream Partners, L.P. has an F-score of 7 indicating the company's financial situation is typical for a stable company.

MMP' s 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 7

3
7

During the past 13 years, the highest Piotroski F-Score of Magellan Midstream Partners, L.P. was 7. The lowest was 3. 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 242.554 + 190.007 + 125.623 + 153.64 = $712 Mil.
Cash Flow from Operations was 270.074 + 251.459 + 179.234 + 175.066 = $876 Mil.
Revenue was 618.606 + 577.438 + 443.835 + 443.912 = $2,084 Mil.
Gross Profit was 347.069 + 295.222 + 220.274 + 251.169 = $1,114 Mil.
Total Assets at the begining of this year (Mar13) was $4,406 Mil.
Total Assets was $5,144 Mil.
Long-Term Debt was $2,691 Mil.
Total Current Assets was $567 Mil.
Total Current Liabilities was $604 Mil.
Net Income was 112.967 + 153.803 + 50.522 + 137.821 = $455 Mil.

Revenue was 432.421 + 503.195 + 325.869 + 449.527 = $1,711 Mil.
Gross Profit was 206.842 + 250.612 + 136.778 + 222.703 = $817 Mil.
Total Assets at the begining of last year (Mar12) was $4,010 Mil.
Total Assets was $4,406 Mil.
Long-Term Debt was $2,392 Mil.
Total Current Assets was $585 Mil.
Total Current Liabilities was $382 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.

Magellan Midstream Partners, L.P.'s current net income was 712. ==> 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.

Magellan Midstream Partners, L.P.'s current cash flow from operations was 876. ==> 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)
=711.824/4405.713
=0.1615684

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=455.113/4009.794
=0.11350034

Magellan Midstream Partners, L.P.'s return on assets of this year was 0.1615684. Magellan Midstream Partners, L.P.'s return on assets of last year was 0.11350034. ==> 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.

Magellan Midstream Partners, L.P.'s current net income was 712. Magellan Midstream Partners, L.P.'s current cash flow from operations was 876. ==> 876 > 712 ==> 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
=2691.288/5143.782
=0.52321191

Gearing (Last Year)=Long-Term Debt/Total Assets
=2391.718/4405.713
=0.54286741

Magellan Midstream Partners, L.P.'s gearing of this year was 0.52321191. Magellan Midstream Partners, L.P.'s gearing of last year was 0.54286741. ==> 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
=567.042/604.15
=0.93857817

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=585.495/382.073
=1.53241658

Magellan Midstream Partners, L.P.'s current ratio of this year was 0.93857817. Magellan Midstream Partners, L.P.'s current ratio of last year was 1.53241658. ==> Last year's current ratio is higher ==> Score 0.

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.

Magellan Midstream Partners, L.P.'s number of shares in issue this year was 227.1. Magellan Midstream Partners, L.P.'s number of shares in issue last year was 226.7. ==> There is larger 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
=1113.734/2083.791
=0.53447491

Gross Margin (Last Year)=Gross Profit/Revenue
=816.935/1711.012
=0.4774572

Magellan Midstream Partners, L.P.'s gross margin of this year was 0.53447491. Magellan Midstream Partners, L.P.'s gross margin of last year was 0.4774572. ==> 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)
=2083.791/4405.713
=0.47297475

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=1711.012/4009.794
=0.4267082

Magellan Midstream Partners, L.P.'s asset turnover of this year was 0.47297475. Magellan Midstream Partners, L.P.'s asset turnover of last year was 0.4267082. ==> 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+1+0+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Magellan Midstream Partners, L.P. 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.

Magellan Midstream Partners, L.P. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1011011101
Q4 1111111111
Q5 1110101001
Q6 0001010100
Q7 0010010000
Q8 0011110111
Q9 1111001000
F-score 6587576646

Magellan Midstream Partners, L.P. Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 1110010111
Q4 1111111111
Q5 0011001111
Q6 1110000000
Q7 0000000000
Q8 1110111111
Q9 0000000101
F-score 6674455767
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