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

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

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 3. It is a bad or low score, which usually implies poor business operation.

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

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 own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was -295.834 + -163.654 + -398.294 + -184.65 = $-1,042 Mil.
Cash Flow from Operations was 87.607 + 251.545 + 161.506 + 175.166 = $676 Mil.
Revenue was 812.431 + 693.685 + 430.763 + 517.092 = $2,454 Mil.
Gross Profit was 294.257 + 248.555 + 65.74 + 175.813 = $784 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(10517.283 + 9929.181 + 9537.84 + 8950.331 + 8656.305) / 5 = $9518.188 Mil.
Total Assets at the begining of this year (Jun15) was $10,517 Mil.
Long-Term Debt was $3,503 Mil.
Total Current Assets was $1,191 Mil.
Total Current Liabilities was $868 Mil.
Net Income was 106.048 + -891.07 + 123.634 + -36.821 = $-698 Mil.

Revenue was 1813.1 + 1785.003 + 1422.178 + 863.37 = $5,884 Mil.
Gross Profit was 631.114 + 590.159 + 502.568 + 374.848 = $2,099 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(12435.999 + 12619.34 + 11862.923 + 10604.598 + 10517.283) / 5 = $11608.0286 Mil.
Total Assets at the begining of last year (Jun14) was $12,436 Mil.
Long-Term Debt was $3,691 Mil.
Total Current Assets was $1,969 Mil.
Total Current Liabilities was $1,223 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 -1,042. ==> 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 676. ==> 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 (Jun15)
=-1042.432/10517.283
=-0.09911609

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=-698.209/12435.999
=-0.05614418

Nabors Industries Ltd's return on assets of this year was -0.09911609. Nabors Industries Ltd's return on assets of last year was -0.05614418. ==> 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.

Nabors Industries Ltd's current net income (TTM) was -1,042. Nabors Industries Ltd's current cash flow from operations (TTM) was 676. ==> 676 > -1,042 ==> 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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=3503.172/9518.188
=0.36805031

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=3691.357/11608.0286
=0.31800034

Nabors Industries Ltd's gearing of this year was 0.36805031. Nabors Industries Ltd's gearing of last year was 0.31800034. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=1191.243/868.175
=1.37212313

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=1969.155/1222.753
=1.61042745

Nabors Industries Ltd's current ratio of this year was 1.37212313. Nabors Industries Ltd's current ratio of last year was 1.61042745. ==> 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 276.6. Nabors Industries Ltd's number of shares in issue last year was 286.1. ==> 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
=784.365/2453.971
=0.31963092

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2098.689/5883.651
=0.35669842

Nabors Industries Ltd's gross margin of this year was 0.31963092. Nabors Industries Ltd's gross margin of last year was 0.35669842. ==> 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 (Jun15)
=2453.971/10517.283
=0.23332747

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=5883.651/12435.999
=0.47311446

Nabors Industries Ltd's asset turnover of this year was 0.23332747. Nabors Industries Ltd's asset turnover of last year was 0.47311446. ==> 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+0+1+0+0+1+0+0
=3

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

Nabors Industries Ltd has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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

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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1110000000
Question 2 1111111111
Question 3 0010000100
Question 4 1111111111
Question 5 1000011100
Question 6 0000000000
Question 7 0011111111
Question 8 1000011110
Question 9 1111100000
F-score 6464455643
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