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Nabors Industries Ltd (NYSE:NBR)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Nabors Industries Ltd has an F-score of 5 indicating the company's financial situation is typical for a stable company.

NBR' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 5

3
8

During the past 13 years, the highest Piotroski F-Score of Nabors Industries Ltd was 8. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 64.444 + 49.919 + 150.603 + -105.381 = $160 Mil.
Cash Flow from Operations was 401.474 + 444.563 + 443.508 + 309.307 = $1,599 Mil.
Revenue was 1623.471 + 1588.153 + 1607.27 + 1549.42 = $6,368 Mil.
Gross Profit was 556.976 + 526.414 + 573.655 + 568.509 = $2,226 Mil.
Total Assets at the begining of this year (Jun13) was $12,267 Mil.
Total Assets was $12,436 Mil.
Long-Term Debt was $3,956 Mil.
Total Current Assets was $2,811 Mil.
Total Current Liabilities was $1,320 Mil.
Net Income was -4.361 + 99.121 + 27.87 + 75.656 = $198 Mil.

Revenue was 1474.147 + 1617.794 + 1614.64 + 1637.604 = $6,344 Mil.
Gross Profit was 501.837 + 622.802 + 601.054 + 530.572 = $2,256 Mil.
Total Assets at the begining of last year (Jun12) was $12,843 Mil.
Total Assets was $12,267 Mil.
Long-Term Debt was $4,071 Mil.
Total Current Assets was $2,893 Mil.
Total Current Liabilities was $1,180 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.

Nabors Industries Ltd's current net income was 160. ==> 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.

Nabors Industries Ltd's current cash flow from operations was 1,599. ==> 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 (Jun13)
=159.585/12266.903
=0.0130094

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=198.286/12843.472
=0.01543866

Nabors Industries Ltd's return on assets of this year was 0.0130094. Nabors Industries Ltd's return on assets of last year was 0.01543866. ==> Last year is higher ==> Score 0.

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.

Nabors Industries Ltd's current net income was 160. Nabors Industries Ltd's current cash flow from operations was 1,599. ==> 1,599 > 160 ==> 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
=3956.29/12435.999
=0.31813206

Gearing (Last Year)=Long-Term Debt/Total Assets
=4071.191/12266.903
=0.33188418

Nabors Industries Ltd's gearing of this year was 0.31813206. Nabors Industries Ltd's gearing of last year was 0.33188418. ==> 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
=2810.638/1319.586
=2.12993924

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2892.832/1180.156
=2.45122848

Nabors Industries Ltd's current ratio of this year was 2.12993924. Nabors Industries Ltd's current ratio of last year was 2.45122848. ==> 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.

Nabors Industries Ltd's number of shares in issue this year was 301. Nabors Industries Ltd's number of shares in issue last year was 297.1. ==> 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
=2225.554/6368.314
=0.34947303

Gross Margin (Last Year)=Gross Profit/Revenue
=2256.265/6344.185
=0.355643

Nabors Industries Ltd's gross margin of this year was 0.34947303. Nabors Industries Ltd's gross margin of last year was 0.355643. ==> Last year's gross margin is higher ==> Score 0.

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 (Jun13)
=6368.314/12266.903
=0.51914603

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=6344.185/12843.472
=0.49396184

Nabors Industries Ltd's asset turnover of this year was 0.51914603. Nabors Industries Ltd's asset turnover of last year was 0.49396184. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+0+0+0+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Nabors Industries Ltd 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.

Nabors Industries Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111101111
Q2 1111111111
Q3 1110001100
Q4 1111111111
Q5 1101011001
Q6 0110110110
Q7 0111010010
Q8 1110010001
Q9 1110001100
F-score 7985466655

Nabors Industries Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1000010000
Q4 1111111111
Q5 0100011111
Q6 1011110000
Q7 1100000000
Q8 0000001110
Q9 1110000011
F-score 7654465565
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