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Nabors Industries Ltd (NYSE:NBR)
Piotroski F-Score
4 (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

Nabors Industries Ltd has an F-score of 4 indicating the company's financial situation is typical for a stable company.

NBR' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 4

3
9

During the past 13 years, the highest Piotroski F-Score of Nabors Industries Ltd was 9. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was -163.654 + -398.294 + -184.65 + -111.211 = $-858 Mil.
Cash Flow from Operations was 251.545 + 161.506 + 175.166 + 68.096 = $656 Mil.
Revenue was 693.685 + 430.763 + 517.092 + 520.041 = $2,162 Mil.
Gross Profit was 248.555 + 65.74 + 175.813 + 213.605 = $704 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(9929.181 + 9537.84 + 8950.331 + 8656.305 + 8424.504) / 5 = $9099.6322 Mil.
Total Assets at the begining of this year (Sep15) was $9,929 Mil.
Long-Term Debt was $3,476 Mil.
Total Current Assets was $1,072 Mil.
Total Current Liabilities was $788 Mil.
Net Income was -891.07 + 123.634 + -36.821 + -295.834 = $-1,100 Mil.

Revenue was 1785.003 + 1422.178 + 863.37 + 812.431 = $4,883 Mil.
Gross Profit was 590.159 + 502.568 + 374.848 + 294.257 = $1,762 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(12619.34 + 11862.923 + 10604.598 + 10517.283 + 9929.181) / 5 = $11106.665 Mil.
Total Assets at the begining of last year (Sep14) was $12,619 Mil.
Long-Term Debt was $3,738 Mil.
Total Current Assets was $1,719 Mil.
Total Current Liabilities was $1,050 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.

Nabors Industries Ltd's current net income (TTM) was -858. ==> Negative ==> Score 0.

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.

Nabors Industries Ltd's current cash flow from operations (TTM) was 656. ==> 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 (Sep15)
=-857.809/9929.181
=-0.08639272

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=-1100.091/12619.34
=-0.087175

Nabors Industries Ltd's return on assets of this year was -0.08639272. Nabors Industries Ltd's return on assets of last year was -0.087175. ==> This year is higher. ==> Score 1.

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.

Nabors Industries Ltd's current net income (TTM) was -858. Nabors Industries Ltd's current cash flow from operations (TTM) was 656. ==> 656 > -858 ==> 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: Sep16)=Long-Term Debt/Average Total Assets from Sep15 to Sep16
=3475.978/9099.6322
=0.38199104

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=3737.773/11106.665
=0.33653423

Nabors Industries Ltd's gearing of this year was 0.38199104. Nabors Industries Ltd's gearing of last year was 0.33653423. ==> Last year is lower than this year ==> Score 0.

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: Sep16)=Total Current Assets/Total Current Liabilities
=1072.08/787.862
=1.36074592

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=1719.075/1049.551
=1.63791469

Nabors Industries Ltd's current ratio of this year was 1.36074592. Nabors Industries Ltd's current ratio of last year was 1.63791469. ==> 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.

Nabors Industries Ltd's number of shares in issue this year was 276.7. Nabors Industries Ltd's number of shares in issue last year was 284.1. ==> 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
=703.713/2161.581
=0.32555477

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1761.832/4882.982
=0.36081067

Nabors Industries Ltd's gross margin of this year was 0.32555477. Nabors Industries Ltd's gross margin of last year was 0.36081067. ==> 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 (Sep15)
=2161.581/9929.181
=0.21769983

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=4882.982/12619.34
=0.38694433

Nabors Industries Ltd's asset turnover of this year was 0.21769983. Nabors Industries Ltd's asset turnover of last year was 0.38694433. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+1+1+0+0+1+0+0
=4

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

Nabors Industries Ltd has an F-score of 4 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.

Nabors Industries Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1110111100
Question 2 1111111111
Question 3 1000110001
Question 4 1111111111
Question 5 0110101101
Question 6 1011011000
Question 7 1101001011
Question 8 1001000101
Question 9 1000110010
F-score 8555666546

Nabors Industries Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 1100000000
Question 2 1111111111
Question 3 0100001001
Question 4 1111111111
Question 5 0000111000
Question 6 0000000000
Question 7 0111111111
Question 8 0000111100
Question 9 1111000000
F-score 4644556434
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