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GuruFocus has detected 5 Warning Signs with Oil-Dri Corp of America $ODC.
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Oil-Dri Corp of America (NYSE:ODC)
Piotroski F-Score
6 (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

Oil-Dri Corp of America has an F-score of 6 indicating the company's financial situation is typical for a stable company.

ODC' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 9
Current: 6

1
9

During the past 13 years, the highest Piotroski F-Score of Oil-Dri Corp of America was 9. The lowest was 1. 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 (Jan17) TTM:Last Year (Jan16) TTM:
Net Income was -0.892 + 5.261 + 2.009 + 4.25 = $10.6 Mil.
Cash Flow from Operations was 2.358 + 5.762 + 1.325 + 7.768 = $17.2 Mil.
Revenue was 64.235 + 64.916 + 66.612 + 65.174 = $260.9 Mil.
Gross Profit was 18.568 + 18.866 + 20.725 + 19.125 = $77.3 Mil.
Average Total Assets from the begining of this year (Jan16)
to the end of this year (Jan17) was
(199.055 + 196.149 + 204.933 + 200.067 + 206.574) / 5 = $201.3556 Mil.
Total Assets at the begining of this year (Jan16) was $199.1 Mil.
Long-Term Debt was $9.1 Mil.
Total Current Assets was $92.8 Mil.
Total Current Liabilities was $29.5 Mil.
Net Income was 1.385 + 5.066 + 5.423 + 3.821 = $15.7 Mil.

Revenue was 65.196 + 65.519 + 67.795 + 65.367 = $263.9 Mil.
Gross Profit was 14.433 + 16.722 + 20.653 + 19.062 = $70.9 Mil.
Average Total Assets from the begining of last year (Jan15)
to the end of last year (Jan16) was
(184.314 + 185.426 + 190.031 + 192.086 + 199.055) / 5 = $190.1824 Mil.
Total Assets at the begining of last year (Jan15) was $184.3 Mil.
Long-Term Debt was $12.3 Mil.
Total Current Assets was $92.7 Mil.
Total Current Liabilities was $32.2 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.

Oil-Dri Corp of America's current net income (TTM) was 10.6. ==> Positive ==> Score 1.

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.

Oil-Dri Corp of America's current cash flow from operations (TTM) was 17.2. ==> 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 (Jan16)
=10.628/199.055
=0.05339228

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan15)
=15.695/184.314
=0.0851536

Oil-Dri Corp of America's return on assets of this year was 0.05339228. Oil-Dri Corp of America's return on assets of last year was 0.0851536. ==> 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.

Oil-Dri Corp of America's current net income (TTM) was 10.6. Oil-Dri Corp of America's current cash flow from operations (TTM) was 17.2. ==> 17.2 > 10.6 ==> 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: Jan17)=Long-Term Debt/Average Total Assets from Jan16 to Jan17
=9.147/201.3556
=0.0454271

Gearing (Last Year: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=12.333/190.1824
=0.06484827

Oil-Dri Corp of America's gearing of this year was 0.0454271. Oil-Dri Corp of America's gearing of last year was 0.06484827. ==> This year is lower or equal to last year. ==> Score 1.

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: Jan17)=Total Current Assets/Total Current Liabilities
=92.778/29.498
=3.14523019

Current Ratio (Last Year: Jan16)=Total Current Assets/Total Current Liabilities
=92.72/32.154
=2.88362257

Oil-Dri Corp of America's current ratio of this year was 3.14523019. Oil-Dri Corp of America's current ratio of last year was 2.88362257. ==> This year's current ratio is higher. ==> Score 1.

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.

Oil-Dri Corp of America's number of shares in issue this year was 7.2. Oil-Dri Corp of America's number of shares in issue last year was 7.1. ==> 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
=77.284/260.937
=0.29617877

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=70.87/263.877
=0.2685721

Oil-Dri Corp of America's gross margin of this year was 0.29617877. Oil-Dri Corp of America's gross margin of last year was 0.2685721. ==> This year's gross margin is higher. ==> Score 1.

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 (Jan16)
=260.937/199.055
=1.3108789

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan15)
=263.877/184.314
=1.43167095

Oil-Dri Corp of America's asset turnover of this year was 1.3108789. Oil-Dri Corp of America's asset turnover of last year was 1.43167095. ==> 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
=1+1+0+1+1+1+0+1+0
=6

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

Oil-Dri Corp of America 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 local exchange's currency.

Oil-Dri Corp of America Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
Question 1 1111111111
Question 2 1111111111
Question 3 1110001011
Question 4 1111111111
Question 5 1111011111
Question 6 1010101011
Question 7 1010111000
Question 8 1011011011
Question 9 0100101100
F-score 8685669577

Oil-Dri Corp of America Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Question 1 1111111111
Question 2 1111111111
Question 3 0001111100
Question 4 1111111111
Question 5 1111111111
Question 6 0001111111
Question 7 0000001000
Question 8 0001111111
Question 9 1000000000
F-score 5447778766
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