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OneBeacon Insurance Group Ltd (NYSE:OB)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 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

OneBeacon Insurance Group Ltd has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

OB' s 10-Year Piotroski F-Score Range
Min: 1   Max: 7
Current: 2

1
7

During the past 13 years, the highest Piotroski F-Score of OneBeacon Insurance Group Ltd was 7. The lowest was 1. And the median was 4.


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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was -1.1 + -37.2 + 24.1 + 3.4 = $-11 Mil.
Cash Flow from Operations was 80.5 + -4.6 + 23.3 + 19.2 = $118 Mil.
Revenue was 301.1 + 332 + 308.2 + 314.2 = $1,256 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(5212 + 5253.2 + 3579.4 + 3588.7 + 3662.3) / 5 = $4259.12 Mil.
Total Assets at the begining of this year (Jun14) was $5,212 Mil.
Long-Term Debt was $275 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was 39.1 + 41.4 + 46.8 + 24.7 = $152 Mil.

Revenue was 311.5 + 315 + 306.8 + 326 = $1,259 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(5215 + 5225.1 + 5211.6 + 5181.1 + 5212) / 5 = $5208.96 Mil.
Total Assets at the begining of last year (Jun13) was $5,215 Mil.
Long-Term Debt was $275 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 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.

OneBeacon Insurance Group Ltd's current net income (TTM) was -11. ==> 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.

OneBeacon Insurance Group Ltd's current cash flow from operations (TTM) was 118. ==> 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 (Jun14)
=-10.8/5212
=-0.00207214

OneBeacon Insurance Group Ltd's return on assets of this year was -0.00207214. OneBeacon Insurance Group Ltd's return on assets of last year was 0.02914669. ==> 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.

OneBeacon Insurance Group Ltd's current net income (TTM) was -11. OneBeacon Insurance Group Ltd's current cash flow from operations (TTM) was 118. ==> 118 > -11 ==> 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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=274.7/4259.12
=0.06449689

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=274.7/5208.96
=0.05273605

OneBeacon Insurance Group Ltd's gearing of this year was 0.06449689. OneBeacon Insurance Group Ltd's gearing of last year was 0.05273605. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=0/0
=

OneBeacon Insurance Group Ltd's current ratio of this year was . OneBeacon Insurance Group Ltd's current ratio of last year was . ==> 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.

OneBeacon Insurance Group Ltd's number of shares in issue this year was 94.9. OneBeacon Insurance Group Ltd's number of shares in issue last year was 94.7. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=0/1255.5
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/1259.3
=0

OneBeacon Insurance Group Ltd's gross margin of this year was 0. OneBeacon Insurance Group Ltd's gross margin of last year was 0. ==> 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 (Jun14)
=1255.5/5212
=0.24088642

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=1259.3/5215
=0.24147651

OneBeacon Insurance Group Ltd's asset turnover of this year was 0.24088642. OneBeacon Insurance Group Ltd's asset turnover of last year was 0.24147651. ==> 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+0+0+0
=2

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

OneBeacon Insurance Group Ltd has an F-score of 2. 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.

OneBeacon Insurance Group Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 10111011
Question 2 11110011
Question 3 10100010
Question 4 01000001
Question 5 10111000
Question 6 00000000
Question 7 01011010
Question 8 00000000
Question 9 00100111
F-score 43543154

OneBeacon Insurance Group Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1011111110
Question 2 1011111111
Question 3 0011111000
Question 4 1100111111
Question 5 0000000000
Question 6 0000000000
Question 7 0111000010
Question 8 0000000000
Question 9 1111011110
F-score 4355455452
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