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GuruFocus has detected 3 Warning Signs with Natures Sunshine Products Inc $NATR.
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Natures Sunshine Products Inc (NAS:NATR)
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

Natures Sunshine Products Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NATR' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 6

2
8

During the past 13 years, the highest Piotroski F-Score of Natures Sunshine Products 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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 2.069 + 2.568 + 4.155 + -6.653 = $2.1 Mil.
Cash Flow from Operations was 2.862 + 3.601 + -1.401 + -1.645 = $3.4 Mil.
Revenue was 82.402 + 89.366 + 85.441 + 83.95 = $341.2 Mil.
Gross Profit was 60.382 + 66.288 + 63.929 + 59.623 = $250.2 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(200.52 + 210.475 + 211.035 + 214.899 + 205.57) / 5 = $208.4998 Mil.
Total Assets at the begining of this year (Dec15) was $200.5 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $100.1 Mil.
Total Current Liabilities was $63.0 Mil.
Net Income was 5.667 + 2.561 + 2.766 + 3.693 = $14.7 Mil.

Revenue was 83.878 + 81.247 + 79.586 + 79.994 = $324.7 Mil.
Gross Profit was 61.997 + 60.179 + 58.943 + 58.241 = $239.4 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(196.799 + 198.297 + 198.788 + 196.683 + 200.52) / 5 = $198.2174 Mil.
Total Assets at the begining of last year (Dec14) was $196.8 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $101.5 Mil.
Total Current Liabilities was $53.1 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.

Natures Sunshine Products Inc's current net income (TTM) was 2.1. ==> 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.

Natures Sunshine Products Inc's current cash flow from operations (TTM) was 3.4. ==> 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 (Dec15)
=2.139/200.52
=0.01066727

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=14.687/196.799
=0.07462944

Natures Sunshine Products Inc's return on assets of this year was 0.01066727. Natures Sunshine Products Inc's return on assets of last year was 0.07462944. ==> Last year is higher ==> Score 0.

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.

Natures Sunshine Products Inc's current net income (TTM) was 2.1. Natures Sunshine Products Inc's current cash flow from operations (TTM) was 3.4. ==> 3.4 > 2.1 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=0/208.4998
=0

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=0/198.2174
=0

Natures Sunshine Products Inc's gearing of this year was 0. Natures Sunshine Products Inc's gearing of last year was 0. ==> This year is lower or equal to last year. ==> Score 1.

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: Dec16)=Total Current Assets/Total Current Liabilities
=100.121/63.035
=1.58833981

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=101.518/53.136
=1.91053147

Natures Sunshine Products Inc's current ratio of this year was 1.58833981. Natures Sunshine Products Inc's current ratio of last year was 1.91053147. ==> Last year's current ratio is higher ==> Score 0.

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.

Natures Sunshine Products Inc's number of shares in issue this year was 19.1. Natures Sunshine Products Inc's number of shares in issue last year was 19.2. ==> 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
=250.222/341.159
=0.73344687

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=239.36/324.705
=0.73716142

Natures Sunshine Products Inc's gross margin of this year was 0.73344687. Natures Sunshine Products Inc's gross margin of last year was 0.73716142. ==> 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 (Dec15)
=341.159/200.52
=1.70137143

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=324.705/196.799
=1.64993216

Natures Sunshine Products Inc's asset turnover of this year was 1.70137143. Natures Sunshine Products Inc's asset turnover of last year was 1.64993216. ==> 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+1+0+1+1+0+1+0+1
=6

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

Natures Sunshine Products Inc 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 local exchange's currency.

Natures Sunshine Products Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 10111111
Question 2 11111111
Question 3 10110010
Question 4 01011101
Question 5 11010111
Question 6 11110000
Question 7 00000001
Question 8 00101000
Question 9 01100001
F-score 55664446

Natures Sunshine Products Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 0000011110
Question 4 1111101101
Question 5 1111111111
Question 6 1000000000
Question 7 0000001101
Question 8 1000000010
Question 9 0000000011
F-score 6444446666
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