Switch to:
NewMarket Corporation (NYSE:NEU)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

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

NewMarket Corporation has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

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

3
8

During the past 13 years, the highest Piotroski F-Score of NewMarket Corporation 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 54.001 + 78.896 + 64.01 + 67.835 = $265 Mil.
Cash Flow from Operations was 69.535 + 85.493 + 95.778 + 27.128 = $278 Mil.
Revenue was 556.371 + 580.455 + 583.779 + 562.608 = $2,283 Mil.
Gross Profit was 151.638 + 163.823 + 169.428 + 170.197 = $655 Mil.
Total Assets at the begining of this year (Dec12) was $1,264 Mil.
Total Assets was $1,327 Mil.
Long-Term Debt was $349 Mil.
Total Current Assets was $897 Mil.
Total Current Liabilities was $248 Mil.
Net Income was 53.063 + 64.715 + 55.268 + 66.547 = $240 Mil.

Revenue was 513.322 + 551.187 + 587.548 + 562.679 = $2,215 Mil.
Gross Profit was 138.861 + 160.269 + 163.609 + 169.536 = $632 Mil.
Total Assets at the begining of last year (Dec11) was $1,192 Mil.
Total Assets was $1,264 Mil.
Long-Term Debt was $424 Mil.
Total Current Assets was $735 Mil.
Total Current Liabilities was $217 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.

NewMarket Corporation's current net income was 265. ==> 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.

NewMarket Corporation's current cash flow from operations was 278. ==> 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)
=264.742/1264.248
=0.2094067

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=239.593/1191.662
=0.20105785

NewMarket Corporation's return on assets of this year was 0.2094067. NewMarket Corporation's return on assets of last year was 0.20105785. ==> 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.

NewMarket Corporation's current net income was 265. NewMarket Corporation's current cash flow from operations was 278. ==> 278 > 265 ==> 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
=349.467/1327.274
=0.2632968

Gearing (Last Year)=Long-Term Debt/Total Assets
=424.407/1264.248
=0.33569917

NewMarket Corporation's gearing of this year was 0.2632968. NewMarket Corporation's gearing of last year was 0.33569917. ==> This year is lower. ==> 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
=897.319/247.614
=3.62386214

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=735.495/216.671
=3.39452442

NewMarket Corporation's current ratio of this year was 3.62386214. NewMarket Corporation's current ratio of last year was 3.39452442. ==> This year's current ratio is higher. ==> Score 1.

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.

NewMarket Corporation's number of shares in issue this year was 13.2. NewMarket Corporation's number of shares in issue last year was 13.4. ==> There is the same number of shares in issue this year, or fewer. ==> Score 1.

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
=655.086/2283.213
=0.2869141

Gross Margin (Last Year)=Gross Profit/Revenue
=632.275/2214.736
=0.28548549

NewMarket Corporation's gross margin of this year was 0.2869141. NewMarket Corporation's gross margin of last year was 0.28548549. ==> 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)
=2283.213/1264.248
=1.80598506

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2214.736/1191.662
=1.858527

NewMarket Corporation's asset turnover of this year was 1.80598506. NewMarket Corporation's asset turnover of last year was 1.858527. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+1+1+0
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

NewMarket Corporation has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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.

NewMarket Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0111010111
Q4 1101010011
Q5 1111011101
Q6 1010100111
Q7 0001111111
Q8 0011010011
Q9 1111100100
F-score 6678574778

NewMarket Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1110010111
Q4 0011110111
Q5 0111100001
Q6 1111111111
Q7 1111111111
Q8 0000111111
Q9 1110000000
F-score 6786775778
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