Switch to:
NASDAQ OMX Group, Inc. (NAS:NDAQ)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

NASDAQ OMX Group, Inc. has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NDAQ' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of NASDAQ OMX Group, Inc. was 8. The lowest was 4. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 141 + 113 + 88 + 42 = $384 Mil.
Cash Flow from Operations was 237 + 82 + 106 + 149 = $574 Mil.
Revenue was 849 + 805 + 814 + 744 = $3,212 Mil.
Gross Profit was 520 + 506 + 451 + 418 = $1,895 Mil.
Total Assets at the begining of this year (Dec12) was $9,132 Mil.
Total Assets was $12,577 Mil.
Long-Term Debt was $2,589 Mil.
Total Current Assets was $3,163 Mil.
Total Current Liabilities was $2,800 Mil.
Net Income was 86 + 89 + 93 + 85 = $353 Mil.

Revenue was 755 + 746 + 815 + 804 = $3,120 Mil.
Gross Profit was 421 + 412 + 427 + 414 = $1,674 Mil.
Total Assets at the begining of last year (Dec11) was $14,091 Mil.
Total Assets was $9,132 Mil.
Long-Term Debt was $1,840 Mil.
Total Current Assets was $1,492 Mil.
Total Current Liabilities was $1,018 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.

NASDAQ OMX Group, Inc.'s current net income was 384. ==> 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.

NASDAQ OMX Group, Inc.'s current cash flow from operations was 574. ==> 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 (Dec12)
=384/9132
=0.04204993

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=353/14091
=0.02505145

NASDAQ OMX Group, Inc.'s return on assets of this year was 0.04204993. NASDAQ OMX Group, Inc.'s return on assets of last year was 0.02505145. ==> 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.

NASDAQ OMX Group, Inc.'s current net income was 384. NASDAQ OMX Group, Inc.'s current cash flow from operations was 574. ==> 574 > 384 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=2589/12577
=0.20585195

Gearing (Last Year)=Long-Term Debt/Total Assets
=1840/9132
=0.20148927

NASDAQ OMX Group, Inc.'s gearing of this year was 0.20585195. NASDAQ OMX Group, Inc.'s gearing of last year was 0.20148927. ==> Last year is lower ==> Score 0.

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
=3163/2800
=1.12964286

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1492/1018
=1.46561886

NASDAQ OMX Group, Inc.'s current ratio of this year was 1.12964286. NASDAQ OMX Group, Inc.'s current ratio of last year was 1.46561886. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

NASDAQ OMX Group, Inc.'s number of shares in issue this year was 173.1. NASDAQ OMX Group, Inc.'s number of shares in issue last year was 169.8. ==> There is more 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
=1895/3212
=0.58997509

Gross Margin (Last Year)=Gross Profit/Revenue
=1674/3120
=0.53653846

NASDAQ OMX Group, Inc.'s gross margin of this year was 0.58997509. NASDAQ OMX Group, Inc.'s gross margin of last year was 0.53653846. ==> 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 (Dec12)
=3212/9132
=0.35173018

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=3120/14091
=0.22141793

NASDAQ OMX Group, Inc.'s asset turnover of this year was 0.35173018. NASDAQ OMX Group, Inc.'s asset turnover of last year was 0.22141793. ==> 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+0+0+0+1+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

NASDAQ OMX Group, 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 own currency.

NASDAQ OMX Group, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1101001011
Q4 1110011111
Q5 0011011000
Q6 0010010110
Q7 0000001111
Q8 0000111111
Q9 1100101011
F-score 5554468687

NASDAQ OMX Group, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1000011111
Q4 1111111111
Q5 1000001010
Q6 0111110000
Q7 1111111100
Q8 1110111111
Q9 1000011111
F-score 8665688776
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide